What is GST?
The GST abbreviated as Goods and Services Tax, is an innovative indirect tax law that went into effect in India on July 1, 2017. GST was designed to replace multiple taxes such as VAT, Service Tax, and Excise Duty, among others. The implementation of GST was an important event in Indian tax history, leading to an uniform tax system across the country, replacing the previous complicated indirect tax structure.
In our country GST has four tax rates: 5%, 12%, 18%, and 28%. These categories are assigned to products and services based on their nature and intended use. GST is administered by the GST Council, which is made up of the Finance Ministers of the Central and State Governments.
Compliances Under GST
With the implementation of GST, there are several new compliances that businesses need to adhere to. Some of the key compliances are:
1. GST registration is required for all businesses with an annual turnover of more than Rs. 20 lakhs (Rs. 10 lakhs for NE and hill states).
2. Under GST, registered businesses are required to submit monthly, quarterly, and annual returns. The returns must be electronically submitted through the GST portal.
3. Invoices issued in accordance with GST regulations must include certain mandatory information, such as the GSTINs of the supplier and recipient, HSN/SAC codes, and the applicable tax rate and amount.
4. Businesses must pay their GST liability on a monthly or quarterly basis, depending on their revenue. The payment must be made electronically through the GST portal.
