GST Working System

Manufacturer: A manufacturer is liable to pay GST on the raw materials purchased and the value added to it afterwards in finalizing the product.

Service Provider: A service provider is liable to pay GST on the purchase of the product as well as the value infused into it. Important point to note here is, that the total GST will not include the tax paid by the manufacturer.

Retailer: A retailer is liable to pay GST on the product purchased from the distributor as well as on the margin they infused into it. Important point to note here is that the total GST will not include the tax paid by the retailer.

Consumer: A consumer pays GST on the purchase of the product.

Types of GST

• SGST
  A State government levies SGST (State Goods and Services tax) on the intra-state transactions of goods and services. The state government collects the revenue generated by SGST where the transaction has occurred. SGST includes pre-existing taxes like Purchase Tax, Luxury Tax, Octroi and VAT etc.

• CGST
  The Central government levies CGST (Central Goods and Services Tax) on the intra-state transactions of goods and services. It is levied alongside SGST and UGST. The revenue is collected and shared equally between the state and central governments.
• IGST
  An IGST (Integrated Goods and Services tax) is levied when the transaction of goods and services occurs inter-state. IGST is applicable on imports and exports too. The revenue is collected and shared between the central and state governments.

Application of GST Types

Entities Liable to Pay GST

• Individuals registered under GST and creating taxable supplies
• GST registered people are needed to make the payment under the reverse charge mechanism
• People registered under GST and required to deduct tax at source (TDS)
• Non-resident individuals paying tax
• E-commerce operators registered under GST
• Agents of input service distributors and suppliers
• Businesses with the turnover higher than the threshold limit
• E-commerce operators registered under GST are required to collect tax at source (TCS)
• Individuals supplying goods and services on behalf of a supplier or manufacturer (agents)
• Individuals registered before GST sparked to life
  

Threshold for GST Registration for Different States

Any entity that has taxable supply of goods and services or both exceeding the threshold amount has to be registered under GSTIN.

GST Tax Rates

Goods and Services Tax a.k.a. GST is the value-added tax levied on the supply of goods and services in India with the motivation to curb the cascading effect of other indirect taxes.

The tax rates under GST are subjected to vary and. Below is the current tax rate under GST:

GST Registration Process

Application form: Once all the documents required are gathered, it is time to fill the application form available online.

TRN and ARN: If you are the first time user, then you will get a TRN (Temporary Reference Number). After the application is submitted successfully, you will receive ARN (Application Reference Number) immediately.

Issuance of GST Registration Certificate: The GST Registration and GSTIN will be issued after the verification process of the application. There will be no hard copy of the registration certificate. The soft copy can be downloaded from the GST portal.

Documents Required for GST Registration

• PAN card
• Aadhaar card wherever possible
• Digital signature in case of companies and LLP
• Valid mobile number and email id
• Photographs of proprietor, partners and authorized persons
• Registration Certificate obtained under previous Tax laws
• Proof of appointment of authorized signatory and their personal details
• Proof of principal place of business
• Opening page of bank statement on the name of the business or proprietor
  

GST Returns

A GST Returns is a collection of a list of documents containing the records of the taxpayer’s income generated from the purchases, Input Tax Credit, sales, and output GST. A GST Returns is mandatory to be submitted with the authorities. The purpose of filing GST Returns is to help the government calculate the taxpayer’s tax liability.

GST registered individuals/entities are mandated to file two monthly and one annual GST Returns. The entire process is online meaning no manual involvement. However, there is no facility for revising the returns. At the time of filing GST Returns, make sure it has the details of all the invoices for the previous unreported tax period. 

GSTIN

GST Identification Number or Goods and Services Tax Identification Number is given to each GST taxpayer for unique identification. GSTIN is a 15-digits code, and can be verified using the GST portal using the GST number. GSTIN is given on the basis of your PAN card and the state you live in. Some of the benefits of having a GSTIN are:

1. Loan availability
2. Ability to claim refunds
3. Easy verification process
4.  Ability to perform corrections

You can verify your GSTIN HERE. Feed in the 15-digits code, type in the captcha, and then enter to complete the process.

GSTN

GSTN is Section 8 (non-profit), non-government, private limited company and is the database for the official GST portal. GST Tax Network is the answer to all your indirect tax concerns. The network is accountable for maintaining the Indirect Taxation platform for GST which helps you prepare, file, correct/modify returns, and make payments of your indirect tax liabilities.

GSTN is a Trusted National Information Utility (NIU) and its primary feature is to safeguard the taxpayers’ information and its confidentiality.

The prime functions of GSTN are handling the invoices, registrations, payments and refunds, and different types of returns.

GST Certificate

Businesses registered under GST are issued a GST Certificate by the Indian government using Form GST REG-06.

Note that the GST Certificate does not come has a hard copy. It is always available in soft copy, so you can download it from the GST portal.

A GST Certificate has following details of the registered taxpayer-

• Date
• GSTIN
• Legal name
• Trade name
• Business constitution
• Address
• Date of liability
• Validity period
• Type of registration
• Details of the approving authority
• Signature
• Specifications of the Approving GST Officer
  

Voluntary Registration Under GST

Businesses with the turnover less than Rs. 20 lakhs are not mandated by the GST law to register, but they can choose to register themselves voluntarily if they want to be imbued by the benefits:

• Increased margins and profits
• Inter-state selling sans restrictions
• Ability to register on e-commerce websites
• Competitive edge in the market
• GST Return Filing

To file a GST Return, you are required to furnish GST compliant sales and purchase invoices. GST Return Filing is a return document containing all the details of your sales, purchases, tax collected on sales (output tax), and tax paid on purchases (input tax) along with the taxpayer’s income. When you file GST returns, you are required to pay the resulting tax liability to the government.

Why Maxigain Capital for Your GST Registration?

GST is known for its stringent penalties if the taxpayer fails to adhere to the rules and guidelines. But fret not with Maxigain Capital! 

We have a team of experts to offer GST services. You will get to team up with top-notch professionals who know the GST law inside out and help you avoid the penalties/risks from the GST authorities. 

• Our GST services include:
• Reconciliation and avoid penalty and notices
• Auto-filled 3B Form and NIL filings in less than a minute
• Optimization of your GST liability in GSTR 3B
• All kinds of filings – G1 to G9. 

Get in touch with our team today to sort out your worries for tomorrow!