ABOUT GST

Goods & Services Tax GST (India) What is GST? Indirect Tax Law Explained

GST - Goods and Services Tax

GST is a multi-stage tax system which is comprehensive in nature and applied on the sale of goods and services. The main aim of this taxation system is to curb the cascading effect of other Indirect taxes and it is applicable throughout India.

What is GST & how it works?

GST stands for Goods and Services Tax. It is an Indirect tax which introduced to replacing a host of other Indirect taxes such as value added tax, service tax, purchase tax, excise duty, and so on. GST levied on the supply of certain goods and services in India. It is one tax that is applicable all over India.

Given below is how will GST works:

Manufacturer: The manufacturer will have to pay GST on the raw material that is purchased and the value that has been added to make the product.

Service Provider: Here, the service provider will have to pay GST on the amount that is paid for the product and the value that has been added to it. However, the tax that has been paid by the manufacturer can be reduced from the overall GST that must be paid.

Retailer: The retailer will need to pay GST on the product that has been purchased from the distributor as well as the margin that has been added. However, the tax that has been paid by the retailer can be reduced from the overall GST that must be paid.

Consumer: GST must be paid on the product that has been purchased.

History Of GST

On July 1st 2017, the Goods and Services Tax implemented in India. But, the process of implementing the new tax regime commenced a long time ago. In 2000, Atal Bihari Vajpayee, then Prime Minister of India, set up a committee to draft the GST law. In 2004, a task force concluded that the new tax structure should put in place to enhance the tax regime at the time.

In 2006, Finance Minister proposed the introduction of GST from 1st April 2010 and in 2011 the Constitution Amendment Bill passed to enable the introduction of the GST law. In 2012, the Standing Committee started discussions about GST, and tabled its report on GST a year later. In 2014, the new Finance Minister at the time, Arun Jaitley, reintroduced the GST bill in Parliament and passed the bill in Lok Sabha in 2015. Yet, the implementation of the law delayed as it was not passed in Rajya Sabha.

GST went live in 2016, and the amended model GST law passed in both the house. The President of India also gave assent. In 2017 the passing of 4 supplementary GST Bills in Lok Sabha as well as the approval of the same by the Cabinet. Rajya Sabha then passed 4 supplementary GST Bills and the new tax regime implemented on 1st July 2017.

Tax Laws Before the Implementation of GST

The Centre and the State used to collect tax separately. Depending on the state, the tax regimes were different.

Even though import tax was levied on one individual, the burden was levied on another individual. In the cases of direct tax, the taxpayer must pay the tax.

Prior to the introduction of GST, direct and indirect taxes were present in India.

Types of GST

The four different types of GST are given below:

Central Goods and Services Tax : CGST is charged on the intra state supply of products and services.

State Goods and Services Tax : SGST, like CGST, is charged on the sale of products or services within a state.

Integrated Goods and Services Tax : IGST is charged on inter-state transactions of products and services.

Union Territory Goods and Services Tax : UTGST is levied on the supply of products and services in any of the Union Territories in the country, viz. Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is levied along with CGST.

Who is Eligible for GST?

The below mentioned entities and individuals must register for Goods And Services Tax:

E-commerce aggregators

Individuals who supply through e-commerce aggregators

Individuals who pay tax as per the reverse change mechanism

Agents of input service distributors and suppliers

Non-Resident individuals who pay tax

Businesses that have a turnover that is more than the threshold limit

Individuals who have registered before the GST law was introduced

Registration of GST

Any company that is eligible under GST must register itself in the GST portal created by the Government of India. The registered entities will get a unique registration number called GSTIN.

It is mandatory for all Service providers, buyers, and sellers to register. A business that makes a total income of Rs.20 lakhs and more in a financial year must be required to do GST registration. It takes 2-6 working days to process.

Know the GSTIN - GST Identification Number

A 15-digit distinctive code that is provided to every taxpayer is the GSTIN. The GSTIN will be provided based on the state you live at and the PAN. Some of the main uses of GSTIN are mentioned below:

Loans can be availed with the help of the number.

Refunds can be claimed with the GSTIN.

The verification process is easy with the help of the GSTIN.

Corrections can be made.

Verify GST Number Online by visiting https://services.gst.gov.in/services/searchtp. Enter the GSTIN mentioned on the invoice in the search box and followed by captcha, Final click "enter" to view the details.

GST Certificate

A GST Certificate is an official document that is issued by the concerned authorities for a business that has been enrolled under the GST system. Any business with an annual turnover of Rs.20 lakh or more and certain special businesses are required to be registered under this system. The GST registration certificate is issued in Form GST REG-06. If you are a registered taxpayer under this system, you can download the GST Certificate from the official GST Portal. The certificate is not issued physically. It is available in digital format only. GST Certificate contains GSTIN, Legal Name, Trade Name, Constitution of Business, Address, Date of liability, Period of Validity, Types of Registration, Particulars of Approving Authority, Signature, Details of the Approving GST officer, and Date of issue of a certificate.

GST Returns

A GST Returns is a document that contains information about the income that a taxpayer must file with the authorities. This information used to compute the taxpayer's tax liability. Under the Goods and Services Tax, registered dealers must file their GST returns with details regarding their purchases, sales, input tax credit, and output GST. Businesses are expected to file 2 monthly returns as well as an annual return.

GST Rates

The GST Council has assigned GST rates to different goods and services. While some products can be purchased without any GST, there are others that come at 5% GST, 12% GST, 18% GST, and 28% GST. GST rates for goods and services have been changed a few time since the new tax regime was implemented in July 2017.

Name of Item Applicable GST Rate

Ghee 12%

TMT BAR 18%

Gold Jewellery 3%

Cement 28%

Goods and Services Tax (GST) on Gold

The Goods and Services Tax (GST), which will be brought in on July 1st, 2017 will usher in a new era in taxation in India and investors, manufacturers as well as consumers have been waiting with bated breath for news regarding the new tax slabs. With GST set to replace taxes such as VAT (value Added Tax), Central Excise Duty and Customs Duty among other taxes, the government has proposed 3 tax slabs under the new tax regime.

The GST for gold was fixed at 3%, with an additional 8% tax levied on making charges. The tax on the making charge was then reduced to 5% due to concerns raised by various groups.

Gold Rate After GST

The price of gold following the adoption of the Goods and Services Tax (GST) regime has seen some fluctuations. Analysts were apprehensive that the tax would lead to a decline in demand for gold due to the high incidence of taxation.

At present, gold prices are seeing a rise due to unstable markets in spite of the additional tax burden. While the overall price of gold has risen, this has been due to the import duty associated with the metal, which has been retained. As a result, gold continues to attract an import duty of 10%, in addition to the 3% GST and 5% making charges GST.

The price of gold after GST has been steadily increasing due to higher demand for the yellow metal in overseas markets. The plunging U.S. dollar has led to higher volumes of trade in the metal, thereby increasing its value.

Long-term outlooks regarding the gold rate in India after GST appear to be mostly positive. Fears of increased smuggling due to the high costs associated with buying the metal abound, but it remains to be seen if these will come to pass. For the moment, the jewellery sector appears to be content with the price of gold after GST, though consumers have a few complaints over the rising cost.GST on Gold Purchase

The tax slabs were announced on June 3rd, 2017 and gold will be taxed at a rate of 3%. In other words, all gold and gold-related jewellery would be taxed at a flat rate of 3%, which would be borne by the end consumer.

GST on Gold Making

In addition to this, the government has also levied a 5% tax on making charges. At present, there is no tax on making charges, which account for close to 12% of the actual cost of the gold.

The tax on making charges was initially fixed at 18%, but appeals from Indian jewellery councils and bodies to reduce the rate resulted in the government fixing it at the present 5%.

A higher tax on making charges would have increased the burden on consumers, since the added cost would have been passed on to them. The initial rate of 18% would have also resulted in consumers having to pay close to 4% as tax.

Jewellery bodies and councils have lauded the change in rate and are confident that it will result in greater transparency in the gold manufacturing market.FAQs on Goods and Services Tax (GST) on Gold

How much is the GST charged on gold in India?

A GST of 3% is charged on gold in India. Moreover, jewellers charge 5% of the price as GST making charge.

Can GST on gold be claimed?

In case you are a registered jeweller, then you can claim an input tax credit of 2% on making charges of jewellery.

Is there any way to save GST on gold?

In case you are selling old gold jewellry and purchasing new gold jewellry in a single transaction, no GST will be charged. This means that individuals can save on GST tax by simply exchanging old gold items with new gold.

How much gold is tax-free for women in India?

In India, a married woman can have up to 500 grams of gold and an unmarried woman can have up to 250 grams of gold.

How much tax is charged on digital gold?

A 20% tax is charged on digital gold.

How much is the GST charged on silver articles and jewellery?

A GST of 3% is charged on silver articles and jewellery.

How much GST will be charged on gold coins?

A GST of 3% will be charged on gold coins.

Is eWay bill required for transportation of gold?

No, eWay bill is not required for transportation of gold according to the CGST Rule 138(14)

How do I calculate GST?

Calculating the amount that needs to be paid as GST when filing your returns can be quite tedious. Several aspects and factors must be taken into consideration, such as ITC, exempted supplies, reverse charge, etc. Failure to pay the entire GST amount can see you slapped with an 18% interest on the shortfall, thereby making it necessary to ensure that you pay the right amount towards GST.

The GST Calculator makes it simple for taxpayers to calculate the amount that needs to paid as GST. You will have to enter all the required details such as the month for which you are calculating GST, the due date for filing returns for the particular month, the actual date on which the returns are filed, the tax liability for the month, the purchases that attract Reverse Charge Mechanism, the opening balance of your cash ledger as well as your credit ledger and the eligible ITC.

It is a trusted National Information Utility (NIU).

Functions of GSTN

The main functions of the GST Network or GSTN can be summed up as follows:

It is responsible for handling the invoices

It is responsible for handling the registrations

It is responsible for handling the payments and refunds (if any)

It is responsible for handling different types of returns.

GST Helpline

Taxpayers who have any confusions or doubts in regard to their GST filing can get in touch with the concerned authority through the GST Helpline. Earlier, taxpayers could get in touch through the helpdesk email ID - helpdesk@gst.gov.in. However, it should be noted that this email ID has been discontinued.

The GST Helpline details are as follows:

Toll Free Phone Number

1800 1200 232

Self Help Portal

https://selfservice.gstsystem.in/