All About Goods And Service Tax

The Goods and Services Tax (GST) is an indirect tax that has replaced many indirect taxes in India. On 29th March 2017 Parliament passed on the GST Act to replace numerous indirect tax laws that had earlier existed in the nation. GST is a destination-based, multi-stage and comprehensive tax that is applied on every value addition. Hence, it is one indirect tax for the whole nation.

Some of the indirect Central taxes subsumed by the government include Service Tax, Additional Duties of Excise, Duties of Excise, and Central Excise Duty, Central surcharges and cesses and Special Additional Duties of Custom. Some of the indirect State taxes subsumed under GST are Entry Tax, State VAT, Gambling Tax, Advertisement Tax, Purchase Tax, Luxury Tax, Entertainment and Amusement Tax, Central Sales Tax and State surcharges and cesses pertaining to supply of merchandizes and services.

The GST tax is a step forward in the enhancement of India’s economic policies and makes Indian commodities and services highly competitive at both global and local level. Now a product would cost the same in any part of the country and therefore GST helps in removing the ambiguity. GST also keeps a check on tax evasions and so the government would benefit by greater tax returns.

The GST applies four tax slabs to services and products in the country which are placed at 5%, 12%, 18% and 28%. Under this division items of basic necessities are kept under different tax slabs from items of luxury. Hence, mass consumption products like food grains are tax free. Commonly used goods like toothpastes and washing powders are kept in the tax slot of 12 to 18 percent which is lower than the prior 20% tax range.

Advantages of GST

GST is a technologically driven tax. The GST Portal makes it easy to register, file returns, apply for refunds and respond to notice. Hence, the whole process is fast and hassle free.

The main aim of GST is to reduce the cost of goods by eliminating tax on tax. GST was formed with a motive to eliminate the cascading influence on services and goods sale. This removal id designed to have a direct influence on the price of merchandizes thereby making the goods consumer centric.

There are higher threshold for registration. Small businesses would benefit from it. There are lesser compliances. Logistics become increasingly effective and

Unorganized sector becomes regulated under the GST Act. Some segments like construction and textile are very much unregulated and unorganized. With the introduction of GST, compliances and payments could be done online. Here the input credit could be attained only on the acceptance of amount by the supplier. Therefore, such industries get regulated and accountable.

GST helps in regulating taxes and so a commodity would charge the same anywhere in India.


The three components of GST are CGST, SGST and IGST.

CGST: The Central Government collects this tax on an intra-state transaction like within Gujarat.

SGST: The State Government collects this tax on an intra-state transaction such as within Gujarat.

IGST: The State Government collects this tax on an inter-state transaction such as from Gujarat to Rajasthan.

In majority of instances if a sale is within a state then under the new regime the taxes would be incurred on both CGST and SGST where the revenues would be collected equally by the State and the Centre. However, in the instance of a sale between two states only IGST would be taxed and only Centre would share the revenues of IGST tax on the basis of the destination of merchandizes.

GST Calculator

A GST Calculator is a beneficial device to compute the values of services and merchandizes. Its formula is as under:

GST Amount = (Original Price x GST Rate) / 100

Net Price = Original Price + GST Amount

Example: If a product is sold from Gujarat to Rajasthan for Rs.10000, and its GST value is 12%, then GST sum pertinent to the produce would be (10000 x 15) / 100 = Rs.1500; and the net amount would be Rs.10000 + Rs.1500 = Rs.11500.

To remove GST you need to follow the below formula:

GST Amount = Original Value – (Original Value x (100 / (100 + GST Rate)))

Net Price = Original Price – GST Amount

GST Registration

It is mandatory for any goods or service provider to register on GST.

GST Returns

People registered under GST have to file GST Returns. The CGST Act 2017 directs numerous categories of GST returns which have to be filed on a monthly basis. There is also a policy of filing annual returns under the GST Act. Businesses registered under GST Composition Scheme have to file their GST returns on both annual and quarterly basis. GSTR 1, GSTR 2 and GSTR 3 are some of the common returns files under this tax system.

Types of GST Returns

GSTR 1: It is a monthly return and the due date is 10th of next month. It contains detailed records of all outward supplies of taxable services and goods. It has thirteen critical headings which are as follows: GSTIN of the taxable entity; name; gross turnover of last financial year; the period of filing of return; taxable outward supplies; outward supplies to end consumer with value exceeding 2.5 lakhs; other supplies left uncovered; debit notes; amendment in the details of any outward supplies of earlier duration; exempted, nil-rated and non-GST commodities; export sales; tax liability arising out of advance receipts; and tax paid.

GSTR 1A: It is a monthly return and the due date is 15th of next month. It contains information pertaining to auto-drafted supplies of services and goods.

GSTR 2: It is a monthly return with a due date of 15th of the next month. It contains details pertaining to inward supplies of services and goods by registered taxable recipients.

GSTR 2A: It is a monthly report having details pertaining to auto drafted supplies from GSTR 1 to GSTR 5to the recipients.

GSTR 3: It is a monthly return with a due date of 20th of next month. This return is centred on the finalisation of data pertaining to both outward and inward supplies along with payment of tax amount by registered persons.

GSTR 3A: It is a notification to return nonpayer under Section 46 of the Central GST Act 2017.

GSTR 3B: It is a simple monthly return with due date of 20th of the coming month. It is introduced to ease the burden of the tax payers. This form was earlier applicable for the months July and August only but now has been made compulsory for each month of the year. All taxpayers have to file an individual GSTR 3B for every single GSTIN possessed by them. The form is in the format of self-declaration return where the taxpayer does not need to supply invoice level information. The taxpayer just has to provide the total value of each field.

GSTR 4: It is a quarterly return having a due date of 18th day of the month next to quarter. It is meant for registered individuals who have chosen the composition levy by composition suppliers.

GSTR 4A: This is an auto-drafted data meant for registered taxpayers who have selected composition levy.

GSTR 5: It is a return form for NRI taxable entities having a return date of 20th of next month.

GSTR 5A: The form provides information pertaining to supply of online data, database access, or retrieval facilities for people living in foreign countries made to non-taxable people in India.

GSTR 6: It is a monthly return form with the due date of 13th of next month for Input Service Distributor by Input Service Distributor.

GSTR 6A: It provides information pertaining to auto-drafted supplies from GSTR 1 to GSTR 5 to Input Service Distributor.

GSTR 7: It is a monthly return with a due date of 10th of next month. It is meant for tax deductor in the form of Tax Deducted at Source.

GSTR 7A: It is a certificate for Tax Deducted at Source. It is auto generated and could be downloaded for record keeping. It contains information on tax deducted and the total payment made.

GSTR 8: The e-commerce operator or the tax collector provides the statement for Tax Collected at Source and the return date of 10th of the next month.

GSTR 9: It is an annual return with a due date of 31st December of the upcoming financial year. It provides GST yearly return by a registered taxpayer.

GSTR 9A: It is a simplified yearly return by compounding taxable entities registered under Section 8.

GSTR 9B: It is a reconciliation statement for entities having annual income more than 1 Crore rupees. Its due date is 31st December of the upcoming financial year. The form has to be filled up on a yearly basis and is in essence an audited annual account which is certified by a competent authority.

GSTR 10: It is the final GST return for taxpayers whose registration is either surrendered or cancelled. The return date is three months from the date of cancelled registration or cancelled order (whatever being the older).

GSTR 11: It is a GST inward supply statement for Universal Identification Number by entities possessing UIN or seeking a refund. The due date of return is 28th day of the next month from which the statement was filed.

ITC- 1A: It is the mismatch report of GST ITC.