What is GST ? Gst vs Vat, Structure of GST ( Easy understand of GST)

                                                              GST IN INDIA                                                            

Easy understand of GST without confusion

                                                       GOOD AND SERVICE TAX                                                              

 GST is a big formation for indirect taxation in India, likes of which the country hasn't seen after Independence. GST will simplify indirect taxation, less complexities, and remove the cascading effect. Financial experts believe that it will have a big positive effect on every kind of businesses. It will be done change the way the economy functions.

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 GST vs VAT  (Difference between GST and VAT with simple meaning)

           GST is important that we must understand the current VAT (Value Added Tax) before understand GST. Direct taxes such as income tax are born by the person must to pay the tax; this means that the tax cannot be transferred to anyone else. The liability of an indirect taxes on the other hand, can be shifted to another person.                                                                                                                                                     So, the person liable to pay the tax can collect the tax from someone else and then pay it to the government; thus, shifting the tax burden. The GST tax falls in this category. The current indirect tax structure, which comprises of so many different taxes.

Central taxes: Tax levied by the Central govt ( Central Sales Tax, Excise Duty etc.) 

State taxes: Tax levied by the various state govts (VAT, Service Tax, Octroi) 

Detailed understand of GST                                                                                                                         

Structure of GST creation :                                                                                                                                  Central and state taxes will be subsumed, and a single tax will be levied on all commodities and services. But there somethings are apart. That is motor spirit, petroleum, natural gas and high-speed diesel.

Levy of  GST :

         All Tax will be levied or taxed at the place of consumption, like a destination-based tax

Registration of GST:

         E-registration upon the PAN of the entity. 

GST Validation :

         The validation will take place on the system, and validation will be carried out on input credit availed, tax payments, and utilization. 

Filing of Returns and Collection of Tax in GST:

         Collecting or depositing tax and filing returns with fixed date.

Service Tax of GST:

         State GST subsumes service tax on Place of Supply

Excise Duty in GST:

          Excise duty will be replaced by Central GST and tax up to retail level. 

Special Additional Duty of GST:

          This duty is subsumed by State GST

Customs Duty of GST:

          The center charges tax on imports under a separate act.

Entry Tax in GST :

           Only an additional 1% will be levied as tax on inter-state supply of certain commodities.

Tax on Inter-State Transfer of Commodities to Agent or Branch:

           This tax is levied but dealers will have access to full credit.

Set-Off of Levy in GST:

           Set-off between State GST and Central GST is not allowed. 

GST Tax on Transfer of Commodities to Agent or Branch:

           This tax may be levied unless TIN of the transferor and transferee is the same.

GST Disallowance of credit on certain items:

           There will be no such disallowance unless the GST Council specifically allows it. 

GST Disallowance of inputs or input services utilised in exempted :

Under GST, there will be no such disallowance, unless the GST Council finalises a list of those items falling under the Negative List.

Cascading Effect in GST:

             Credit available on the whole amount of taxes up to retailer.

Threshold limits for of GST:

             State GST will range between Rs.10 lakh to Rs.20 lakh based on recommendations of the GST Council. 

Levy of tax on NGOs and government bodies in GST:

             Certain government bodies, non-profit organisations and PSUs will be covered. 

Exemptions in GST:

             There will be no such exemptions, and the GST Council may introduce an Investment Refund Scheme for certain zones.  

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