Goods & Services Tax

An Overview

Goods and Services Tax (GST) is a comprehensive tax on goods and services consumed in India, replacing various indirect taxes. Enforced from July 1, 2017, under the Goods and Service Tax Act, it impacts businesses based on turnover.

Who Needs GST Registration?

A ‘taxable person’ conducting business in India must register under GST. This includes individuals, companies, LLPs, co-operatives, and more. Registration becomes mandatory if turnover exceeds specified limits.

Turnover Limits:

  • Service Providers: Rs. 20 lakhs (Rs. 10 lakhs in special category states).
  • Goods Suppliers: Rs. 40 lakhs (Rs. 20 lakhs in special category states) for exclusive goods suppliers meeting certain conditions.

Special Category States:

Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.

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    GSTIN Explained

    What is GSTIN?

    • GSTIN (Goods and Services Tax Identification Number) is a 15-character identifier based on PAN and state. First two digits represent the state code, followed by the applicant’s PAN. 
    • The GSTIN is structured as follows:
      • The first two digits represent the state code.
      • The next ten digits are the PAN card number of the taxpayer.
      • The thirteenth digit is an entity code used to distinguish between different types of taxpayers.
      • The fourteenth digit is a fixed alphabet ‘Z’.
      • The fifteenth digit is a check digit, which is used to verify the accuracy of the GSTIN.
    •  

    Components of GST:

    • The different parts of Goods and Services Tax (GST) in India are:
    • Central Goods and Services Tax (CGST)
      • This is a tax imposed by the central government on the supply of goods and services within a state or between states. The CGST rate is the same for all states and union territories.
    • State Goods and Services Tax (SGST)
      • This is a tax levied by the state government on the supply of goods and services within the state. The SGST rate varies from state to state.
    • Integrated Goods and Services Tax (IGST)
      • This is a tax imposed by the central government on the supply of goods and services between different states. The IGST rate is the combined rate of CGST and SGST.
    • Union Territory Goods and Services Tax (UTGST)
      • This is a tax imposed by the central government on the supply of goods and services within a union territory. The UTGST rate is the same as the SGST rate.
    1. Any individual or business entity engaged in taxable transactions of goods or services.
    2. The business must have an annual turnover surpassing the specified threshold limit, which is currently ₹20 lakhs for most businesses.
    3. E-commerce operators that facilitate the exchange of goods and services through their platform.
    4. Non-resident taxable persons who, on occasion, provide goods or services in India.
    5. Businesses engaged in the inter-state provision of goods or services.
    6. Input service distributors responsible for allocating input tax credit to their branches or units.
    7. Casual taxable persons who intermittently supply goods or services in India.
    8. Businesses that were previously registered under the old tax regime (VAT, Service Tax, etc.) and have transitioned to GST.
     
     

    1. Individual

    • PAN card.
    • Aadhaar card.
    • Bank account statement or cancelled cheque.
    • Passport-size photograph.
      •  

    2. Partnership

    • PAN card of the firm.
    • Partnership deed.
    • Aadhaar cards of all partners.
    • Bank account statement or cancelled cheque.
    • Passport-size photograph of one partner.
      •  

    3. Company

    • PAN card of the company.
    • Company incorporation certificate.
    • Memorandum and Articles of Association.
    • Aadhaar card of the authorised signatory.
    • Bank account statement or cancelled cheque.
    • Passport-size photograph of the authorised signatory.

    4. Non-Resident

    • PAN card of the non-resident.
    • Passport.
    • Aadhaar card or any other proof of address.
    • Bank account statement or cancelled cheque.
    • Passport-size photograph.
     
     
     
     
     
     

    GST Filing

    What are the benefits of filing GST?

    • Simplified Tax Structure:
      • GST replaces multiple indirect taxes with a single tax, simplifying the tax structure. This reduces the compliance burden for businesses.
    • Streamlined Processes:
      • GST filing is done online, leading to a more streamlined and efficient process. It reduces paperwork and manual efforts, making it easier for businesses to comply with tax regulations.
    • Input Tax Credit (ITC):
      • Businesses can claim input tax credit on the taxes paid on their purchases. This encourages proper documentation and compliance, as businesses are incentivized to deal with registered suppliers.
    • Improved Cash Flow:
      • The availability of input tax credit ensures that businesses are not taxed on taxes, leading to better cash flow management. This can positively impact the financial health of businesses.
    • Compliance Ratings:
      • Regular and accurate GST filing contributes to a business’s compliance rating. A higher compliance rating may lead to various benefits, such as easier access to credit and a positive reputation in the business ecosystem.

    Components of GST:

    • The different parts of Goods and Services Tax (GST) in India are:
    • Central Goods and Services Tax (CGST)
      • This is a tax imposed by the central government on the supply of goods and services within a state or between states. The CGST rate is the same for all states and union territories.
    • State Goods and Services Tax (SGST)
      • This is a tax levied by the state government on the supply of goods and services within the state. The SGST rate varies from state to state.
    • Integrated Goods and Services Tax (IGST)
      • This is a tax imposed by the central government on the supply of goods and services between different states. The IGST rate is the combined rate of CGST and SGST.
    • Union Territory Goods and Services Tax (UTGST)
      • This is a tax imposed by the central government on the supply of goods and services within a union territory. The UTGST rate is the same as the SGST rate.
     

    GST Filing Returns - Types & Due Dates

    GST Filing Returns Purpose
    GSTR1 Tax returns for sales are completed using this form. It includes information about both interstate and intrastate business-to-business (B2B) and business-to-customer (B2C) sales, including purchases subject to reverse charge and inter-state stock transfers made during the tax period. If the filing of Form GSTR-1 is delayed, a late fee will be imposed in the subsequent open return using Form GSTR-3B. Starting from January 1, 2022, taxpayers won't be allowed to submit Form GSTR-1 if they haven't filed Form GSTR-3B in the previous month.
    GSTR1A This form is utilized for amendments, specifically to rectify errors in the GSTR-1 document. It addresses discrepancies between the GSTR-1 of a taxpayer and the GSTR-2 of their customers. The filing period for this form is between the 15th and 17th of the subsequent month.
    GSTR2 This form is used to submit monthly GST returns for received inward supplies. It includes information about the taxpayer, the return period, and detailed purchase information at the final invoice level for both goods and services during the specified tax period.
    GSTR2A The GSTN automatically generates a tax return for a taxpayer, summarizing purchases and inward supplies. This compilation relies on the details provided in the GSTR-1 forms submitted by their suppliers.
    GSTR2B GSTR-2B is an automatically generated document serving as an Input Tax Credit (ITC) statement for taxpayers. According to the GST Council, GSTR-2B aims to reduce the time required for return filing, minimize errors, facilitate reconciliation, and simplify compliance processes.
    GSTR3 This form is employed to submit consolidated monthly tax returns. It includes the taxpayer's fundamental information (name, GSTIN, etc.), the relevant period for the return, turnover specifics, comprehensive aggregate-level details of both inward and outward supplies, tax liabilities under CGST, SGST, IGST, and additional tax (+1% tax), information about Input Tax Credit (ITC), cash, and liability ledgers, along with particulars regarding other payments like interests, penalties, and fees.
    GSTR3A This is a notification from the tax authority sent to a defaulter who has not timely filed their monthly GST returns.
    GSTR3B The Government of India has introduced temporary consolidated summary GST returns for both inward and outward supplies. This is provided as a relaxation measure for businesses that have recently registered under GST.
    GSTR4 This is the quarterly GST return filed by compounding vendors. It includes the total value of supplies made during the covered period, along with details of the tax paid at the compounding rate (not exceeding 1% of aggregate turnover) for that period. Additionally, it provides invoice details for inward supplies, specifically for imports or purchases from normal taxpayers.
    GSTR4A This is the quarterly purchase-related tax return submitted by composition dealers. The return is automatically generated by the GSTN portal, relying on the information provided in the GSTR-1, GSTR-5, and GSTR-7 forms of the suppliers.
    GSTR5 This is a flexible return designed for non-resident foreign taxpayers. It encompasses information about the taxpayer, the relevant return period, and comprehensive details of all goods and services sold and purchased, including invoice particulars. Additionally, it incorporates information on the imports made by the taxpayer on Indian soil for the registered period or month.
    GSTR6 This is the monthly GST return specifically designed for Input Service Distributors (ISDs). It includes the basic information of the taxpayer such as name and GSTIN, the relevant period for the return, detailed supply information extracted from the GSTR-1 of counterparties at the invoice level, and specific details of invoices, including the GSTIN of the taxpayer receiving the credit. Additionally, it encompasses a distinct ISD ledger, incorporating the opening ITC balance for the period, credit for ITC services received, debit for reversed or distributed ITC, and the closing balance.
    GSTR7 This is a monthly return filed for TDS transactions. It includes the basic information of the taxpayer, such as name and GSTIN, along with the relevant period for the return. Additionally, it features the GSTIN of the supplier and details of the invoices against which the tax has been deducted. The form is categorized under the major tax heads - SGST, CGST, and IGST. Moreover, it incorporates details of any other payments, such as interests and penalties.
    GSTR8 This is the monthly return specifically for e-commerce operators. It encompasses the basic information of the taxpayer, including name and GSTIN, along with the relevant period for the return. The details include supplies made to customers through the e-commerce portal by both registered taxable persons and unregistered individuals. It further includes basic information about the customers, indicating whether or not they are registered taxpayers. Additionally, the return outlines the amount of tax collected at source, tax payable, and tax paid by the e-commerce operator.
    GSTR9 This is an annual consolidated tax return that provides a detailed breakdown of the taxpayer's income and expenditure. The information is regrouped in accordance with the monthly GST returns filed by the taxpayer.
    GSTR9A This is an annual return form required to be filed by e-commerce operators who collect tax at the source.
    GSTR9B This is an annual return form that must be filed by e-commerce operators who collect tax at the source.
    GSTR9C This audit form is mandatory for taxpayers whose annual aggregate turnover exceeds ₹2 crores, and they are required to undergo an annual audit for their financial reports.
    GSTR10 Submitting GST returns prior to canceling GST registration is essential. This concluding GST return is to be filed when permanently discontinuing business activities or canceling GST registration. It includes comprehensive details of all supplies, liabilities, tax collected, and tax payable.
    GSTR11 This is a flexible tax return designed for taxpayers with a UIN (Unique Identification Number). It encompasses details of purchases made by foreign embassies and diplomatic missions for self-consumption during a specific month.

    The Goods and Services Tax (GST) was introduced in India on July 1, 2017, as a comprehensive indirect tax on the supply of goods and services. The GST Login process facilitates easy access to information for commercial establishments, and GST online verification is welcomed for its convenience.

    The GST login process is straightforward, requiring a valid GST number and an Indian mobile number. Here are the steps:

      1. Visit the GST Login portal.
      2. Click on the ‘Login’ tab at the top right corner.
      3. Enter your GST number and mobile number in the respective fields.
      4. Click ‘Send OTP’ and enter the OTP received on your mobile.
      5. Click ‘Login’ to access your GST dashboard.

    Checking GST status involves these steps:

      1. Visit the official GST Login portal.
      2. Scroll down to ‘Services’ and click on ‘Query/Feedback on Registration’ under ‘GST REGISTRATION.’
      3. Enter your GSTIN and click ‘Submit.’
      4. A pop-up window displays your GST status details.
      5. Optionally, download the information in PDF format.

    For GST rate changes from March 1, 2023:

      •  Notification No. 04/2023 exempts GST on Rab sold loosely or without pre-packaging, reducing the rate from 18% to zero. Rab sold in pre-packaged form is revised from 18% to 5%.
      •  Notification No. 03/2023 reduces the GST rate on pencil sharpeners from 18% to 12%, reclassifying them under the HSN code 8214.
      •  Notification No. 02/2023 includes courts and tribunals under the reverse charge mechanism for taxation of services.
      •  Notification No. 01/2023 extends GST exemption to services provided by boards, authorities, or bodies set up by the Central or State Government, including the National Testing Agency (NTA) for entrance examinations.

    This information provides an overview of the GST login process, checking GST status, and recent GST rate changes. For detailed assistance, consider consulting a tax professional or visiting the official GST website.

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