What is GST?

GST stands for Goods and Services Tax. It is an indirect tax that is levied on the supply of goods and services in India. It was implemented on 1st July 2017, and it replaced various indirect taxes such as value-added tax (VAT), service tax, central excise duty, and many others.

GST is a comprehensive tax that is levied on every stage of the supply chain, from the manufacturer to the consumer. The tax is based on the value of the goods or services supplied, and it is collected by businesses and remitted to the government.

The GST system in India is divided into three categories: CGST (Central Goods and Services Tax), SGST (State Goods and Services Tax), and IGST (Integrated Goods and Services Tax). CGST and SGST are levied by the central and state governments, respectively, while IGST is levied on inter-state transactions.

GST has streamlined the taxation system in India, reduced the burden of multiple taxes on businesses, and has made compliance easier for taxpayers.

Some key rules of GST:

Registration: Any person who is engaged in the supply of goods and services with an annual turnover of more than Rs. 20 lakh (Rs. 10 lakh for special category states) is required to register under GST.

Tax Rates: GST has different tax rates ranging from 0% to 28% depending on the nature of goods and services supplied.

Input Tax Credit (ITC): The tax paid on inputs (goods and services used in the production of final goods) can be claimed as a credit against the output tax liability.

Filing of Returns: Registered persons are required to file periodic returns based on the nature of their business activities.

Payment of Tax: The payment of tax can be done through online mode only.

Reverse Charge Mechanism (RCM): Under RCM, the recipient of goods or services is liable to pay GST instead of the supplier in certain cases.

Composition Scheme: Small taxpayers with an annual turnover of up to Rs. 1.5 crore can opt for the composition scheme and pay a lower rate of tax.

E-way Bill: E-way bill is required for the movement of goods worth more than Rs. 50,000 in value to ensure the proper tax compliance.

Anti-Profiteering: Any reduction in tax rates or availability of ITC should be passed on to the customers and not be used for profiteering by businesses.

Audit: Registered persons with an annual turnover of more than Rs. 2 crore are required to get their accounts audited by a Chartered Accountant or a Cost Accountant.

The process steps for GST e-filing process are as follows:

Registration:

First, you need to register for GST on the GST portal (https://www.gst.gov.in/). You will need to provide your personal details and information about your business, such as the type of business and the location of your business.

Collecting Invoices and Receipts:

Collect invoices and receipts for all the purchases and sales made by your business during the relevant tax period. Ensure that these documents contain all the necessary details required for GST compliance.

Preparation of GST Returns:

Prepare the GST returns based on the invoices and receipts collected during the tax period. There are three types of GST returns that need to be filed - GSTR-1 (sales), GSTR-2A (purchase), and GSTR-3B (summary of sales and purchase). GSTR-9 (annual return) is also required to be filed on a yearly basis.

Filing of GST Returns:

Log in to the GST portal using your registered credentials and file the GST returns. The returns can be filed either online or offline. The GST portal allows for multiple methods of payment, such as payment through net banking, debit card, credit card, or over the counter payment at designated banks.

Verification:

Once the returns are filed, the GST portal will generate an acknowledgement in the form of an electronic receipt. Verify the receipt to ensure that the filing process is complete.