Goods & Services Tax (GST) What is

GST in India? Indirect Tax Law

Explained

1. What is GST in India?

GST is known as the Goods and Services Tax. It is an indirect tax which has
replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc.
The Goods and Service Tax Act was passed in the Parliament on 29th March 2017
and came into effect on 1st July 2017.

In other words,Goods and Service Tax (GST) is levied on the supply of goods and
services. Goods and Services Tax Law in India is a comprehensive, multi-stage,
destination-based tax that is levied on every value addition. GST is a single
domestic indirect tax law for the entire country.

Before the Goods and Services Tax could be introduced, the structure of indirect tax
levy in India was as follows:
 Under the GST regime, the tax is levied at every point of sale. In the case of intra-
state sales, Central GST and State GST are charged. All the inter-state sales are
chargeable to the Integrated GST.

Now, let us understand the definition of Goods and Service Tax, as mentioned
above, in detail.

Multi-stage

An item goes through multiple change-of-hands along its supply chain: Starting from
manufacture until the final sale to the consumer.

Let us consider the following stages:

 Purchase of raw materials

 Production or manufacture

 Warehousing of finished goods

 Selling to wholesalers

 Sale of the product to the retailers

 Selling to the end consumers

Destination-Based

Consider goods manufactured in Maharashtra and sold to the final consumer in

Karnataka. Since the Goods and Service Tax is levied at the point of consumption,
the entire tax revenue will go to Karnataka and not Maharashtra.

The Journey of GST in India

The GST journey began in the year 2000 when a committee was set up to draft law.
It took 17 years from then for the Law to evolve. In 2017, the GST Bill was passed in
the Lok Sabha and Rajya Sabha. On 1st July 2017, the GST Law came into force.

Objectives Of GST
 To achieve the ideology of ‘One Nation, One Tax’

GST has replaced multiple indirect taxes, which were existing under the previous tax
regime. The advantage of having one single tax means every state follows the same
rate for a particular product or service. Tax administration is easier with the Central
Government deciding the rates and policies. Common laws can be introduced, such
as e-way bills for goods transport and e-invoicing for transaction reporting. Tax
compliance is also better as taxpayers are not bogged down with multiple return
forms and deadlines. Overall, it’s a unified system of indirect tax compliance.
 To subsume a majority of the indirect taxes in India

India had several erstwhile indirect taxes such as service tax, Value Added Tax
(VAT), Central Excise, etc., which used to be levied at multiple supply chain stages.
Some taxes were governed by the states and some by the Centre. There was no
unified and centralised tax on both goods and services. Hence, GST was
introduced. Under GST, all the major indirect taxes were subsumed into one. It has
greatly reduced the compliance burden on taxpayers and eased tax administration
for the government.

 To eliminate the cascading effect of taxes

One of the primary objectives of GST was to remove the cascading effect of taxes.
Previously, due to different indirect tax laws, taxpayers could not set off the tax
credits of one tax against the other. For example, the excise duties paid during
manufacture could not be set off against the VAT payable during the sale. This led
to a cascading effect of taxes. Under GST, the tax levy is only on the net value
added at each stage of the supply chain. This has helped eliminate the cascading
effect of taxes and contributed to the seamless flow of input tax credits across both
goods and services.

 To curb tax evasion

GST laws in India are far more stringent compared to any of the erstwhile indirect
tax laws. Under GST, taxpayers can claim an input tax credit only on invoices
uploaded by their respective suppliers. This way, the chances of claiming input tax
credits on fake invoices are minimal. The introduction of e-invoicing has further
reinforced this objective. Also, due to GST being a nationwide tax and having a
centralised surveillance system, the clampdown on defaulters is quicker and far
more efficient. Hence, GST has curbed tax evasion and minimised tax fraud from
taking place to a large extent.

 To increase the taxpayer base

GST has helped in widening the tax base in India. Previously, each of the tax laws
had a different threshold limit for registration based on turnover. As GST is a
consolidated tax levied on both goods and services both, it has increased tax-
registered businesses. Besides, the stricter laws surrounding input tax credits have
helped bring certain unorganised sectors under the tax net. For example, the
construction industry in India.

 Online procedures for ease of doing business

Previously, taxpayers faced a lot of hardships dealing with different tax authorities
under each tax law. Besides, while return filing was online, most of the assessment
and refund procedures took place offline. Now, GST procedures are carried out
almost entirely online. Everything is done with a click of a button, from registration to
return filing to refunds to e-way bill generation. It has contributed to the overall ease
of doing business in India and simplified taxpayer compliance to a massive extent.
The government also plans to introduce a centralised portal soon for all indirect tax
compliance such as e-invoicing, e-way bills and GST return filing.

 An improved logistics and distribution system

A single indirect tax system reduces the need for multiple documentation for the
supply of goods. GST minimises transportation cycle times, improves supply chain
and turnaround time, and leads to warehouse consolidation, among other benefits.
With the e-way bill system under GST, the removal of interstate checkpoints is most
beneficial to the sector in improving transit and destination efficiency. Ultimately, it
helps in cutting down the high logistics and warehousing costs.

 To promote competitive pricing and increase consumption

Introducing GST has also led to an increase in consumption and indirect tax
revenues. Due to the cascading effect of taxes under the previous regime, the prices
of goods in India were higher than in global markets. Even between states, the lower
VAT rates in certain states led to an imbalance of purchases in these states. Having
uniform GST rates have contributed to overall competitive pricing across India and
on the global front. This has hence increased consumption and led to higher
revenues, which has been another important objective achieved.

Advantages Of GST
GST has mainly removed the cascading effect on the sale of goods and services.
Removal of the cascading effect has impacted the cost of goods. Since the GST
regime eliminates the tax on tax, the cost of goods decreases.

Also, GST is mainly technologically driven. All the activities like registration, return
filing, application for refund and response to notice needs to be done online on the
GST portal, which accelerates the processes.
 What are the components of GST?
There are three taxes applicable under this system: CGST, SGST & IGST.

 CGST: It is the tax collected by the Central Government on an intra-state sale

(e.g., a transaction happening within Maharashtra)

 SGST: It is the tax collected by the state government on an intra-state sale

(e.g., a transaction happening within Maharashtra)

 IGST: It is a tax collected by the Central Government for an inter-state sale

(e.g., Maharashtra to Tamil Nadu)

In most cases, the tax structure under the new regime will be as follows:

Transaction New Old Regime Revenue Distribution

Regime

Sale within the CGST + VAT + Central Revenue will be shared equally between the
State SGST Excise/Service Centre and the State
tax

Sale to another IGST Central Sales Tax There will only be one type of tax (central) in case
State + Excise/Service of inter-state sales. The Centre will then share the
Tax IGST revenue based on the destination of goods.
Goods & Services Tax (GST) What is
GST in India? Indirect Tax Law
Explained

1. What is GST in India?

GST is known as the Goods and Services Tax. It is an indirect tax which has
replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc.
The Goods and Service Tax Act was passed in the Parliament on 29th March 2017
and came into effect on 1st July 2017.

In other words,Goods and Service Tax (GST) is levied on the supply of goods and
services. Goods and Services Tax Law in India is a comprehensive, multi-stage,
destination-based tax that is levied on every value addition. GST is a single
domestic indirect tax law for the entire country.

Before the Goods and Services Tax could be introduced, the structure of indirect tax
levy in India was as follows:

Under the GST regime, the tax is levied at every point of sale. In the case of intra-
state sales, Central GST and State GST are charged. All the inter-state sales are
chargeable to the Integrated GST.

Now, let us understand the definition of Goods and Service Tax, as mentioned
above, in detail.
 Multi-stage

An item goes through multiple change-of-hands along its supply chain: Starting from
manufacture until the final sale to the consumer.

Let us consider the following stages:

 Purchase of raw materials

 Production or manufacture

 Warehousing of finished goods

 Selling to wholesalers

 Sale of the product to the retailers

 Selling to the end consumers

The Goods and Services Tax is levied on each of these stages making it a multi-
stage tax.

Value Addition

A manufacturer who makes biscuits buys flour, sugar and other material. The value
of the inputs increases when the sugar and flour are mixed and baked into biscuits.

The manufacturer then sells these biscuits to the warehousing agent who packs
large quantities of biscuits in cartons and labels it. This is another addition of value
to the biscuits. After this, the warehousing agent sells it to the retailer.

The retailer packages the biscuits in smaller quantities and invests in the marketing
of the biscuits, thus increasing its value. GST is levied on these value additions, i.e.
the monetary value added at each stage to achieve the final sale to the end
customer.

Destination-Based

Consider goods manufactured in Maharashtra and sold to the final consumer in

Karnataka. Since the Goods and Service Tax is levied at the point of consumption,
the entire tax revenue will go to Karnataka and not Maharashtra.

2. The Journey of GST in India

The GST journey began in the year 2000 when a committee was set up to draft law.
It took 17 years from then for the Law to evolve. In 2017, the GST Bill was passed in
the Lok Sabha and Rajya Sabha. On 1st July 2017, the GST Law came into force.
3. Objectives Of GST
 To achieve the ideology of ‘One Nation, One Tax’

GST has replaced multiple indirect taxes, which were existing under the previous tax
regime. The advantage of having one single tax means every state follows the same
rate for a particular product or service. Tax administration is easier with the Central
Government deciding the rates and policies. Common laws can be introduced, such
as e-way bills for goods transport and e-invoicing for transaction reporting. Tax
compliance is also better as taxpayers are not bogged down with multiple return
forms and deadlines. Overall, it’s a unified system of indirect tax compliance.

 To subsume a majority of the indirect taxes in India

India had several erstwhile indirect taxes such as service tax, Value Added Tax
(VAT), Central Excise, etc., which used to be levied at multiple supply chain stages.
Some taxes were governed by the states and some by the Centre. There was no
unified and centralised tax on both goods and services. Hence, GST was
introduced. Under GST, all the major indirect taxes were subsumed into one. It has
greatly reduced the compliance burden on taxpayers and eased tax administration
for the government.

 To eliminate the cascading effect of taxes

One of the primary objectives of GST was to remove the cascading effect of taxes.
Previously, due to different indirect tax laws, taxpayers could not set off the tax
credits of one tax against the other. For example, the excise duties paid during
manufacture could not be set off against the VAT payable during the sale. This led
to a cascading effect of taxes. Under GST, the tax levy is only on the net value
added at each stage of the supply chain. This has helped eliminate the cascading
effect of taxes and contributed to the seamless flow of input tax credits across both
goods and services.

 To curb tax evasion

GST laws in India are far more stringent compared to any of the erstwhile indirect
tax laws. Under GST, taxpayers can claim an input tax credit only on invoices
uploaded by their respective suppliers. This way, the chances of claiming input tax
credits on fake invoices are minimal. The introduction of e-invoicing has further
reinforced this objective. Also, due to GST being a nationwide tax and having a
centralised surveillance system, the clampdown on defaulters is quicker and far
more efficient. Hence, GST has curbed tax evasion and minimised tax fraud from
taking place to a large extent.

 To increase the taxpayer base

GST has helped in widening the tax base in India. Previously, each of the tax laws
had a different threshold limit for registration based on turnover. As GST is a
consolidated tax levied on both goods and services both, it has increased tax-
registered businesses. Besides, the stricter laws surrounding input tax credits have
helped bring certain unorganised sectors under the tax net. For example, the
construction industry in India.
 Online procedures for ease of doing business

Previously, taxpayers faced a lot of hardships dealing with different tax authorities
under each tax law. Besides, while return filing was online, most of the assessment
and refund procedures took place offline. Now, GST procedures are carried out
almost entirely online. Everything is done with a click of a button, from registration to
return filing to refunds to e-way bill generation. It has contributed to the overall ease
of doing business in India and simplified taxpayer compliance to a massive extent.
The government also plans to introduce a centralised portal soon for all indirect tax
compliance such as e-invoicing, e-way bills and GST return filing.

 An improved logistics and distribution system

A single indirect tax system reduces the need for multiple documentation for the
supply of goods. GST minimises transportation cycle times, improves supply chain
and turnaround time, and leads to warehouse consolidation, among other benefits.
With the e-way bill system under GST, the removal of interstate checkpoints is most
beneficial to the sector in improving transit and destination efficiency. Ultimately, it
helps in cutting down the high logistics and warehousing costs.

 To promote competitive pricing and increase consumption

Introducing GST has also led to an increase in consumption and indirect tax
revenues. Due to the cascading effect of taxes under the previous regime, the prices
of goods in India were higher than in global markets. Even between states, the lower
VAT rates in certain states led to an imbalance of purchases in these states. Having
uniform GST rates have contributed to overall competitive pricing across India and
 on the global front. This has hence increased consumption and led to higher
revenues, which has been another important objective achieved.

4. Advantages Of GST
GST has mainly removed the cascading effect on the sale of goods and services.
Removal of the cascading effect has impacted the cost of goods. Since the GST
regime eliminates the tax on tax, the cost of goods decreases.

Also, GST is mainly technologically driven. All the activities like registration, return
filing, application for refund and response to notice needs to be done online on the
GST portal, which accelerates the processes.

5. What are the components of GST?

There are three taxes applicable under this system: CGST, SGST & IGST.

 CGST: It is the tax collected by the Central Government on an intra-state sale

(e.g., a transaction happening within Maharashtra)

 SGST: It is the tax collected by the state government on an intra-state sale

(e.g., a transaction happening within Maharashtra)

 IGST: It is a tax collected by the Central Government for an inter-state sale

(e.g., Maharashtra to Tamil Nadu)

In most cases, the tax structure under the new regime will be as follows:

Transaction New Old Regime Revenue Distribution

 Regime

Sale within CGST + VAT + Central Revenue will be shared equally between the Centre
the State SGST Excise/Service tax and the State

Sale to IGST Central Sales Tax + There will only be one type of tax (central) in case of
another State Excise/Service Tax inter-state sales. The Centre will then share the IGST
revenue based on the destination of goods.

Illustration:

 Let us assume that a dealer in Gujarat had sold the goods to a dealer in Punjab
worth Rs. 50,000. The tax rate is 18% comprising of only IGST.

In such a case, the dealer has to charge IGST of Rs.9,000. This revenue will go to
Central Government.

 The same dealer sells goods to a consumer in Gujarat worth Rs. 50,000. The
GST rate on goods is 12%. This rate comprises CGST at 6% and SGST at 6%.

The dealer has to collect Rs.6,000 as Goods and Service Tax, Rs.3,000 will go to
the Central Government and Rs.3,000 will go to the Gujarat government since the
sale is within the state.
 Tax Laws before GST
In the earlier indirect tax regime, there were many indirect taxes levied by both the
state and the centre. States mainly collected taxes in the form of Value Added Tax
(VAT). Every state had a different set of rules and regulations.

Inter-state sale of goods was taxed by the centre. CST (Central State Tax) was
applicable in case of inter-state sale of goods. The indirect taxes such as the
entertainment tax, octroi and local tax were levied together by state and centre.
These led to a lot of overlapping of taxes levied by both the state and the centre.

For example, when goods were manufactured and sold, excise duty was charged by
the centre. Over and above the excise duty, VAT was also charged by the state. It
led to a tax on tax effect, also known as the cascading effect of taxes.

The following is the list of indirect taxes in the pre-GST regime:

 Central Excise Duty

 Duties of Excise

 Additional Duties of Excise

 Additional Duties of Customs

 Special Additional Duty of Customs

 Cess

 State VAT

 Central Sales Tax

 Purchase Tax

 Luxury Tax
  Entertainment Tax

 Entry Tax

 Taxes on advertisements

 Taxes on lotteries, betting, and gambling

CGST, SGST, and IGST have replaced all the above taxes.

However, certain taxes such as the GST levied for the inter-state purchase at a
concessional rate of 2% by the issue and utilisation of ‘Form C’ is still prevalent.

It applies to certain non-GST goods such as:

i. Petroleum crude;

ii. High-speed diesel

iii. Motor spirit (commonly known as petrol);

iv. Natural gas;

v. Aviation turbine fuel; and

vi. Alcoholic liquor for human consumption.

It applies to the following transactions only:

 Resale

 Use in manufacturing or processing

 Use in certain sectors such as the telecommunication network, mining, the

generation or distribution of electricity or any other power sector
What are the New Compliances Under
GST?
Apart from online filing of the GST returns, the GST regime has introduced several
new systems along with it.

e-Way Bills

GST introduced a centralised system of waybills by the introduction of “E-way bills”.

This system was launched on 1st April 2018 for inter-state movement of goods and
on 15th April 2018 for intra-state movement of goods in a staggered manner.

Under the e-way bill system, manufacturers, traders and transporters can generate
e-way bills for the goods transported from the place of its origin to its destination on
a common portal with ease. Tax authorities are also benefited as this system has
reduced time at check -posts and helps reduce tax evasion.

E-invoicing

The e-invoicing system was made applicable from 1st October 2020 for businesses
with an annual aggregate turnover of more than Rs.500 crore in any preceding
financial years (from 2017-18). Further, from 1st January 2021, this system was
extended to those with an annual aggregate turnover of more than Rs.100 crore.

Later, the system expanded to cover businesses with turnover over Rs.10
crore from 1st October 2022. Recently, CBIC extended the e-invoicing for
businesses having more than Rs 5 crore turnover w.e.f 1st August 2023.

These businesses must obtain a unique invoice reference number for every
business-to-business invoice by uploading on the GSTN’s invoice registration portal.
The portal verifies the correctness and genuineness of the invoice. Thereafter, it
authorises using the digital signature along with a QR code.

e-Invoicing allows interoperability of invoices and helps reduce data entry errors. It is
designed to pass the invoice information directly from the IRP to the GST portal and
the e-way bill portal. It will, therefore, eliminate the requirement for manual data
entry while filing GSTR-1 and helps in the generation of e-way bills too.

What is GST Registration

Under Goods And Services Tax (GST), businesses whose turnover exceeds
the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be,
must register as a normal taxable person. It is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization

carries on business without registering under GST, it is an offence under GST and
heavy penalties will apply.

GST registration usually takes between 2-6 working days. Team Clear can help you
obtain GST registration faster in 3 easy steps.
 Who should obtain the GST
registration?
 Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax
etc.)

 Businesses with turnover above the threshold limit of Rs.40 lakh or Rs.20 lakh
or Rs.10 lakh as the case may be

 Casual taxable person / Non-Resident taxable person

 Agents of a supplier & Input service distributor

 Those paying tax under the reverse charge mechanism

 A person who supplies via an e-commerce aggregator

 Every e-commerce aggregator

 Person supplying online information and database access or retrieval services

from a place outside India to a person in India, other than a registered taxable
person

1. GST Registration Online: Documents

Required, Limit, Fees, Process,
Penalty
 What is GST Registration
Under Goods And Services Tax (GST), businesses whose turnover exceeds
the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be,
must register as a normal taxable person. It is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization

carries on business without registering under GST, it is an offence under GST and
heavy penalties will apply.

GST registration usually takes between 2-6 working days. Team Clear can help you
obtain GST registration faster in 3 easy steps.

Who should obtain the GST

registration?
 Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax
etc.)

 Businesses with turnover above the threshold limit of Rs.40 lakh or Rs.20 lakh
or Rs.10 lakh as the case may be

 Casual taxable person / Non-Resident taxable person

 Agents of a supplier & Input service distributor

 Those paying tax under the reverse charge mechanism

 A person who supplies via an e-commerce aggregator

 Every e-commerce aggregator

 Person supplying online information and database access or retrieval services
from a place outside India to a person in India, other than a registered taxable
person

All about the GST registration process

GST registration can be obtained on the GST portal. One must apply for GST
registration in Form REG-01 on the GST portal following steps outlined in our article
“How to apply for GST registration?”.

However, the GST registration services at ClearTax helps you to get your business
GST registered and obtain your GSTIN.

Clear GST experts will guide you on the applicability and compliances under GST
for your business and get your business registered under GST.

Register Now

Documents Required for GST

Registration
 PAN of the Applicant

 Aadhaar card

 Proof of business registration or Incorporation certificate

 Identity and Address proof of Promoters/Director with Photographs

 Address proof of the place of business

 Bank Account statement/Cancelled cheque

 Digital Signature

 Letter of Authorization/Board Resolution for Authorized Signatory

What is a GST Return?

A GST return is a document containing details of all income/sales and/or
expenses/purchases that a GST-registered taxpayer (every GSTIN) is required to
file with the tax administrative authorities. This is used by tax authorities to calculate
net tax liability.

Under GST, a registered dealer has to file GST returns that broadly include:

 Purchases

 Sales

 Output GST (On sales)

 Input tax credit (GST paid on purchases)

To file GST returns or for GST filings, check out the Clear GST software that allows
the import of data from various ERP systems such as Tally, Busy, custom Excel, to
name a few. There is also the option to use the desktop app for Tally users to
directly upload data and file.
Who should file GST Returns?
Under the GST regime, regular businesses having more than Rs.5 crore as annual
aggregate turnover (and taxpayers who have not opted for the QRMP scheme) have
to file two monthly returns and one annual return. This amounts to 25 returns each
year.

Taxpayers with a turnover of up to Rs.5 crore have the option to file returns under
the QRMP scheme. The number of GSTR filings for QRMP filers is 9 each year,
which include 4 GSTR-1 and GSTR-3B returns each and an annual return. Note that
QRMP filers have to pay tax on a monthly basis even though they are filing returns
quarterly.

There are also separate statements/returns required to be filed in special cases

such as composition dealers where the number of GSTR filings is 5 each year (4
statement-cum-challans in CMP-08 and 1 annual return GSTR-4).

How many returns are there under

GST?
There are 13 returns under GST. They are the GSTR-1, GSTR-3B, GSTR-4, GSTR-
5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, GSTR-9, GSTR-10, GSTR-11, CMP-08,
and ITC-04. However, all returns do not apply to all taxpayers. Taxpayers file returns
based on the type of taxpayer/type of registration obtained.

Eligible taxpayers, i.e. with a turnover exceeding Rs.5 crore are also required to also
file a self-certified reconciliation statement in Form GSTR-9C.
 Besides the GST returns that are required to be filed, there are statements of input
tax credit available to taxpayers, namely GSTR-2A (dynamic) and GSTR-2B
(static). There is also an Invoice Furnishing Facility (IFF) available to small
taxpayers who are registered under the QRMP scheme to furnish their Business to
Business (B2B) sales for the first two months of the quarter. These small taxpayers
will still need to pay taxes on a monthly basis using Form PMT-06.

We have explained the various GST returns, along with applicability and due dates
in the section below

What are the different types of GST

returns and the due dates to file them?

Here is a list of all the returns to be filed as prescribed under the GST Law along
with the due dates.

Return
Form Description Frequency Due Date

GSTR-1 Details of outward Monthly 11th of the next month.

supplies of taxable goods
and/or services affected. Quarterly 13th of the month succeeding the quarter.
(If opted
Return
Form Description Frequency Due Date

under the
QRMP
scheme)

IFF Details of B2B supplies of Monthly 13th of the next month.

(Optional by taxable goods and/or (for the first
taxpayers services affected. two months
under the of the
QRMP quarter)
scheme)

GSTR-3B Summary return of Monthly 20th of the next month.

outward supplies and
input tax credit claimed, Quarterly 22nd or 24th of the month succeeding the quarter***
along with payment of tax (For
by the taxpayer. taxpayers
under the
QRMP
scheme)

CMP-08 Statement-cum-challan to Quarterly 18th of the month succeeding the quarter.

make a tax payment by a
taxpayer registered under
the composition scheme
under Section 10 of the
Return
Form Description Frequency Due Date

CGST Act.

GSTR-4 Return for a taxpayer Annually 30th of the month succeeding a financial year.
registered under the
composition scheme
under Section 10 of the
CGST Act.

GSTR-5 Return to be filed by a Monthly 20th of the next month.

non-resident taxable (Amended to 13th by Budget 2022; yet to be notified by
person. CBIC.)

GSTR-5A Return to be filed by non- Monthly 20th of the next month.

resident OIDAR service
providers.

GSTR-6 Return for an input Monthly 13th of the next month.

service distributor to
distribute the eligible
input tax credit to its
branches.

GSTR-7 Return to be filed by Monthly 10th of the next month.

Return
Form Description Frequency Due Date

registered persons
deducting tax at source
(TDS).

GSTR-8 Return to be filed by e- Monthly 10th of the next month.

commerce operators
containing details of
supplies effected and the
amount of tax collected at
source by them.

GSTR-9 Annual return by a regular Annually 31st December of the next financial year.
taxpayer.

GSTR-9C Self-certified Annually 31st December of the next financial year.

reconciliation statement.

GSTR-10 Final return to be filed Once, when Within three months of the date of cancellation or date of
by a taxpayer whose the GST cancellation order, whichever is later.
GST registration is registration is
cancelled. cancelled or
surrendered.
Return
Form Description Frequency Due Date

GSTR-11 Details of inward supplies Monthly 28th of the month following the month for which statement
to be furnished by a filed.
person having UIN and
claiming a refund

ITC-04 Statement to be filed by a Annually 25th April where AATO is up to Rs.5 crore.
principal/job-worker (for AATO
about details of goods up to Rs.5
sent to/received from a crore)
job-worker 25th October and 25th April where AATO exceeds Rs.5 cro

Half-yearly (AATO = Annual aggregate turnover)

(for AATO
> Rs.5
crore)
 What is an eWay Bill?
EWay Bill is an Electronic Way bill for movement of goods to be generated on the
eWay Bill Portal. A GST registered person cannot transport goods in a vehicle
whose value exceeds Rs. 50,000 (Single Invoice/bill/delivery challan) without an e-
way bill that is generated on ewaybillgst.gov.in.
Alternatively, Eway bill can also be generated or cancelled through SMS, Android
App and by site-to-site integration through API entering the correct GSTIN of parties.
Validate the GSTIN with the help of the GST search tool before using it.
When an eway bill is generated, a unique Eway Bill Number (EBN) is allocated and
is available to the supplier, recipient, and the transporter.

When Should eWay Bill be issued?

eWay bill will be generated when there is a movement of goods in a vehicle/
conveyance of value more than Rs. 50,000 (either each Invoice or in aggregate of all
invoices in a vehicle/conveyance) –

 In relation to a ‘supply’

 For reasons other than a ‘supply’ ( say a return)

 Due to inward ‘supply’ from an unregistered person

For this purpose, a supply may be either of the following:

 A supply made for a consideration (payment) in the course of business

 A supply made for a consideration (payment) which may not be in the course of
business

 A supply without consideration (without payment)In simpler terms, the term

‘supply’ usually means a:

 Sale – sale of goods and payment made

 Transfer – branch transfers for instance

 Barter/Exchange – where the payment is by goods instead of in money

Therefore, eWay Bills must be generated on the common portal for all these types of
movements. For certain specified Goods, the eway bill needs to be generated
mandatorily even if the value of the consignment of Goods is less than Rs. 50,000:

 Inter-State movement of Goods by the Principal to the Job-worker by Principal/

registered Job-worker

 Inter-State Transport of Handicraft goods by a dealer exempted from GST

registration

Who should Generate an eWay Bill?

 Registered Person – Eway bill must be generated when there is a movement
of goods of more than Rs 50,000 in value to or from a registered person. A
Registered person or the transporter may choose to generate and carry eway
bill even if the value of goods is less than Rs 50,000.
 Unregistered Persons – Unregistered persons are also required to generate
e-Way Bill. However, where a supply is made by an unregistered person to a
registered person, the receiver will have to ensure all the compliances are met
as if they were the supplier.

 Transporter – Transporters carrying goods by road, air, rail, etc. also need to
generate e-Way Bill if the supplier has not generated an e-Way Bill.

Understanding the basics of GST

Updated on: Jul 12th, 2022
|
5 min read

People have taken note of the GST or the Goods Services Tax law. A new law has
been proposed which is set to reform how people do business and the way goods
and services are taxed in India. Whether it makes goods cheaper for the common
man like you and me, nobody can tell. But this is going to impact our lives in our
jobs, our businesses and the overall economic environment. Reason enough for us
to learn something about it!

Who does it apply to?

 To every person who supplies goods and/or services of value exceeding Rs

20 lakh in a financial year. (Limit is Rs 10 lakh for some special
 category states). Compulsory registration for these. And GST must be paid
when turnover exceeds Rs 20 lakh (Rs 10 lakh for some special
category states).

 To any person making inter-state taxable supply of goods and/or services

 Every e-commerce operator

 Every person who supplies goods and/or services, other than branded services,
through e-commerce operator

 Aggregators who supply services under their own brand name

 Casual Taxable Person

 Non-Resident Taxable Person

 Person required to deduct/collect tax (TDS/TCS)

 Input Service Distributor

 Person supplying online information and database access or retrieval services

from a place outside India to a person in india, other than a registered taxable
person.

 Person required to pay tax under Reverse Charge

 Person supplying the goods on behalf of other taxable person (eg. Agent)

 GST does NOT apply to Agriculturists

 GST does not apply to any person engaged exclusively in the business of
supplying goods and/or services that are not liable to tax or are wholly exempt
from tax under this Act

What is the GST framework as per the new law?

 GST is expected to replace a myriad of indirect taxes such as VAT, customs duty,
Excise, CST, Service Tax, Entertainment Tax with a single tax called the Goods and
Services Tax.

 Broadly there will be 2 forms of GST in India.

 At the intra-state level (when goods travel within a state) and at the inter-state
level (when goods travel between states).

 At the intra-state level two types of GST shall be levied CGST (Central
Goods and Services Tax) and SGST (State Goods and Services Tax).

 At the inter-state level IGST (Or Integrated Goods and Services Tax) shall be
levied.

 Imports shall be considered as inter-state supply.

 Exports shall be zero rated.

 Supplies to SEZ will be Zero-rated

Will the new GST allow tax cascading benefits?

Many of us are aware that service tax and VAT have cascading benefits, which
means you can avail credit of tax paid by you on inputs. For example in case of
service tax – you levy service tax on services you sell and while depositing this tax
you can take credit of service tax paid by you on services used as inputs. This
cascading benefit shall also be available in case of GST.

Here is how set off works in case of GST

IGST payments can be set off against – IGST, CGST, SGST on inputs CGST
payments can be set off against – IGST and CGST on inputs SGST payments can
be set off against – IGST and SGST on inputs Hope our readers will find this
information about GST useful