GST

GST REGISTRATION 

Registration is the most fundamental requirement for the identification of taxpayers to ensure compliance and to obtain a unique registration number for the purpose of collecting tax on behalf of the Government and to avail ITC accrued on the inward supplies)

Benefits of registration

Registration will confer the following advantages to a taxpayer.

(a) He is legally recognized as supplier of goods or services 

(b) He is legally authorized to collect taxes from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.

(c) He can claim input tax credit of taxes paid and can utilize the same for payment of taxes due on supply of goods or services

(d) Seamless flow of Input Tax Credit from suppliers to recipients at the national level

Compulsory Registration

The following class of persons shall compulsorily register: -

(a) persons making Inter-State Taxable supply.

(b) Casual Taxable person.

(c) Persons who are required to pay tax under reverse charge.

(d) Persons who are required to pay tax as e-commerce operators.

(e) non-residential taxable person.

(f) Persons required to deduct tax as TDS (Government Agencies, Department etc.,)

(g) Persons required to collect tax as TCS (electronic Commerce operator)

Casual taxa

Goods and services tax (GST)

GST is an indirect tax, which is a transaction-based taxation regime, that has been in effect in India since 1 July 2017

Multiple indirect taxes (except customs duty) have been subsumed within GST, and there is one single tax applicable on supply of goods and services. However, there are a few products that continue to be outside the ambit of GST, such as petrol, diesel, aviation turbine fuel (ATF), natural gas, alcohol for human consumption, and crude oil.

For smooth GST implementation, the government has formed a GST Council. The Council consists of the State Finance Ministers representing their states. The GST Council provides recommendations to the government on various aspects of GST law, such as rate revisions and amendments in GST rules, etc.

GST regime

GST is a comprehensive 'consumption tax' levied on the supply of all goods and services. Indian GST is a dual model:

In case of intra-state supply of goods and services, GST+SGST/UTGST would become applicable, and in case of inter-state supply of goods and services, integrated GST (IGST). The rate of GST varies from 5% to 28% depending upon the category of goods and services being supplied or procured, the general rate of tax being 18% for the majority of supplies. Additionally, some categories of goods/services, such as vehicles, aerated beverages, etc. notified by the government are subject to compensation cess under GST.

Import of goods and services

The import of goods under the GST regime will be subject to IGST and compensation cess (if applicable), along with basic custom duty (BCD)and social welfare surcharge (up to 10% levied on the BCD), BCD and social welfare surcharge paid at the time of imports are not available as credit under GST; consequently, they will always be a cost to the importer.

Similar to erstwhile service tax laws, on import of service, service recipient would be liable to pay IGST under reverse charge. Also, there are specified categories of goods and services notified by the government on which GST needs to be paid by the recipient under reverse charge such as legal services. Goos Transport Agency services, etc.

CBIC vide Notification Nos.11/2023 and 13/2023 and 13/2023 dated 26 September 2023, has exempted the importers from paying IGST on ocean freight in CIF contracts. This is pursuant to the Supreme Court's pronouncement inf the matter of Moth Minerals.

Zero-rated supplies/export of goods and services

Export of goods and services are zero rated under GST. Exporters can claim refund of input tax credit (ITC) of inputs/input services used in export of goods/services, subject to fulfilment of prescribed conditions. To claim the zero, rate on exports, there is a requirement to file a bond/Letter of Undertaking (LUT) to the jurisdictional tax authorities at the beginning of each financial year. Alternatively, the exporter can pay tax on output and claim refund for the same.

Also, the supplies to an SEZ for authorized operations have been made zero rated under GST. Unlike the erstwhile indirect tax regime, which involved a lot of paperwork to claim export refund claims, a simplified online process to claim refund of exports has been speckled under GST.

(A) Bank account for credit of refund means such bank account of the applicant that is in the name of the applicant and obtained on one's Permanent Account Number (PAN)

(B) Option for filing refund of accumulated ITC by taxpayers making exempt/nil-rated supplies, by selecting an option of not having an LUT number is the refund application (to enable a taxpayer making exempt and/or nil-rated supplies, without LUT, to file a refund application as they don't have a valid LUT number to enter in the refund application the Form RFD-01has now been modified

(C) To facilitate exporters, bunching of refund claims across financial years has now been allowed.

(D) Previously to claim a refund of zero-rated supply of services, there was a requirement to receive remittance in foreign exchange within a stipulated time period. Now this requirement has been extended to zero-rated supply of goods as well.

(E) Refund of accumulated ITC is restricted to the amount appearing in Form GSTR-2A/2B. However, the department has now clarified that the restriction will not impact the refund of ITC availed on the invoices/documents relating to imports, input service Distributor (ISD)invoices, and the inwards supplies liable to reverse charge (RC supplies) merely because the same is not reflecting in Form GSTR-

2A

(F) For export of goods, if unutilized ITC is claimed as refund, it is proposed to be mandated to realize the considerations foreign currency within the timelines prescribed in the Foreign Exchanged Management Act (FEMA) guidelines, if the consideration is not realized within the prescribed time, the refund needs to be remitted back to the government along with interest.

(G) Refund of payment wrongly made through electronic credit ledger is allowed (refund amount would be re-credited to credit ledger).

(1) "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract

(2) "existing law" means any law, notification, order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by Parliament or any Authority or person having the power to make such law, notification, order, rule or regulation.

(3) "family" means-  (I) the spouse and children of the person, and the parents, grand-parents, brothers and sisters of the person if they are wholly or namely dependent on the said person.

(4) "Fixed establishment" means a place (other than the registered place of business) which is characterized by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs.

(5) "fund" means the consumer welfare fund established under section 57.

(6) "electronic cash ledger" means the electronic cash ledger referred to in sub section (1) of section 49.

(7) "existing law" means any law, notification order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by parliament or any Authority or person having the power to make such law notification, order, rule or regulation.