What is GST?

GST stands for 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. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer.

Components of GST

• CGST: Collected by the Central Government on an intra-state sale (e.g., within Maharashtra)
• SGST: Collected by the State Government on an intra-state sale (e.g., within Maharashtra)
• IGST: Collected by the Central Government for inter-state sale (e.g., Maharashtra to Tamil Nadu)

How Does GST Work?

GST is a comprehensive tax levy on manufacture, sale, and consumption of goods and services at a national level. The introduction of GST has consolidated many central and state taxes into a single tax and allowed for a seamless flow of tax credits from the manufacturers to the consumers. GST is levied at every point of sale.

Benefits of GST

• Elimination of Multiple Taxes: GST has replaced a plethora of indirect taxes such as VAT, CST, Service tax, CAD, SAD, and Excise.
• Simple and Easy Online Procedure: The entire process of GST (from registration to filing returns) is online and simple.
• Transparent Taxation System: GST has brought a transparent and corruption-free tax administration.
• Reduction in Logistics Costs: GST has resulted in the free movement of goods across states, reducing logistics costs.

Frequently Asked Questions

Q: Who needs to register for GST?

Any business whose turnover exceeds the threshold limit of Rs. 40 lakhs (Rs. 20 lakhs for North-Eastern and hill states) is required to register for GST.

Q: What are the GST rates?

GST has five tax rates: 0%, 5%, 12%, 18%, and 28%. The rate depends on the type of goods and services.

Q: How to file GST returns?

GST returns can be filed online through the GST portal. Businesses must file monthly, quarterly, and annual returns depending on their turnover and type of registration.