Goods and Service Tax

Goods and Service Tax is an indirect tax that has replaced various other indirect taxes, particularly Value Added Tax (VAT), excise duty, services tax, etc. It is a tax mainly charged on the supply of a different range of commodities or goods and services. It has coupled all the previously imposed indirect taxes into one and presently serves as a single domestic tax which is indirect.

Goods and Services Tax ( GST) was imposed with objectives that have a much broader perspective than the ones imposed earlier in the country. The main objectives are as follows:

•  The imposition of GST has a great advantage of compiling all the indirect taxes into a single domestic indirect tax. This is easily adopted and implemented in every state with similar rates of tax for various kinds of goods and services. Thus, it aims to attain the principle of “One Nation, One Tax”.
• It has eliminated the Cascading Effect where one tax is imposed on the other. Cascading effect implies levying of taxes on every single stage of the production process of goods and services and is continuously taxed until it reaches the final consumer and he/she has to bear the burden of multiple taxes which causes inflation in prices of goods and services.
• It has helped curb the incidences of tax evasion. Tax Evasion implies an illegal attempt to avoid taxes that intends to reduce the burden of tax liability on the taxpayers. It reduces the tax concession and the government’s revenue income.
• The GST system is quite an easy and simple process to comply and therefore it becomes beneficial for the start-ups and the existing business. Also, small businesses with an annual turnover ranging from 20-75 lakhs are provided with an option of complying with lower taxes by using the Composition scheme.
• It has also generalized a competitive pricing system and increased consumption. The earlier tax system resulted in higher prices of the commodities mainly in India and low VAT rates in different states that led to a discrepancy in the levels of purchase and sales. Thus, promoting a competitive price system has increased revenue generation and consumption.

Goods and Services Tax is mainly of Four Types

1. CGST.
2. SGST.
3. IGST.
4. UTGST.

• CGST: Tax collected by the Central Government. Intra-state transactions i.e, in a single state.
• SGST: Tax collected by the state government. Intra-state transactions in a single state.
• IGST: Tax collected by the Central Government. Transactions are done between two separate states or a state and also a Union Territory, i.e., intra-state.
• UTGST: Tax collected by the Union Territory government. Transactions take place within a single UT.

GST Portal

GST portal is a government website that provides a wide range of services to the taxpayers such as filing of GST returns, registration for GST, refunding applications, and also calling off the GST registration.

Registration Process

1. First, one has to visit the official GST site of the government and click on the option “GST Practitioners”. Click on the “Register Now” option.
2. One has to select the “New Registration” option available and then furnish all the necessary details and also upload the required documents.
3. After the details are provided, one shall receive a “One Time Password (OTP)”. The OTP has to be entered including the characters that are provided in an image in the given box and subsequently click on the option “Proceed”.
4. After the submission of the application forms, one will receive an acknowledgment number. Once the GST number, User Id, and password are received the application process comes to an end. We are sufficed with all the relevant details that one needs to log in to the GST portal.

Conclusion

The introduction of the GST system has eliminated the issues related to the old tax regime that was followed in India earlier.  The comprehensive system has made the tax process easy, accountable, and reliable. It promotes foreign investment on a larger scale. It also helps the government to keep a serious track of the business activities in India.