Goods & Service Tax

The expanding number of e-commerce transactions and companies, the Government of India has included provisions in the Income Tax Act, 1961 (‘Act’) to tax such transactions. Moreover, this article provides a concise explanation of the provisions implemented by the Finance Acts, 2016 (FA 2016) and 2020 (FA 2020). Clause 44 to Section 2 of the Central Goods and Services Tax Act, 2017 (the Act), electronic commerce is defined as supply of goods or services or both, including digital products, over digital or electronic network. It implies a channel whereby commercial transactions involving supply of goods or services or both, are facilitated electronically. A person who owns, operates or manages such a facility or channel electronically over the internet in order to facilitate such e-commerce transaction is known as an electronic commerce operator (ECO). Common examples of ECO include Flipkart, Amazon, Zomato, etc. E-Commerce E-commerce (electronic commerce) is the action of purchasing or selling items or providing products electronically via online services or the Internet via a digital or electronic facility or platform. Amazon, Flipkart, Myntra, Paytm, Zomato, Swiggy, and other well-known Indian e-commerce examples include Amazon, Flipkart, Myntra, Paytm, Zomato, Swiggy, and others. E-commerce company methods have introduced new tax issues. Moreover, the difficulties of characterizing the nature of payment and establishing a nexus or link between a taxable transaction, activity, and a taxing jurisdiction, as well as the difficulty of locating the transaction, activity, and identifying the taxpayer for income tax purposes, are typical direct tax issues relating to e-commerce. Taxation of e-commerce The taxability of e-commerce transactions under GST arises when there is a supply of goods, services or both. Where goods or services supplied are exempt from being chargeable to tax under GST, there is no liability. An instance of this includes supplying alcoholic liquor for human consumption, which is outside the ambit of being leviable to tax under GST. Provisions Applicable Income Tax Act Provision For E-Commerce Transactions GST Regulations for E-Commerce Transaction Income Tax Act  Provisions under Income Tax Act, 1961 on E-Commerce Transaction are: Equalization Levy:Under this provision the following provisions are applicable Levy on Non-Residents’ Online Advertising Services: The Equalization Levy was first established by the Finance Act, 2016. Further, it is controlled by the provisions of Chapter VIII of the Finance Act – “Equalization Levy,” which allows for the taxation of digital transactions. The Equalisation Levy is a direct tax on the revenue of a Non-Resident E-Commerce Operator, although it is not the same as Income Tax. By introducing clause 50 under section 10 of the Act, every receipt subject to the equalization charge was thus deemed free from income tax.Initially, an equalization levy of 6% was levied on consideration received for the following defined services performed by a non-resident service provider under Chapter VIII of the Finance Act, 2016.  Online advertising;  Moreover, other provision for digital advertising space or any facility or service for the purpose of online advertising;   Any such service as specified by the Central Government.. If the aggregate amount of consideration for specified service in a previous year exceeds one lakh rupees, every person, whether a resident carrying on business or profession or a non-resident having a permanent establishment in India, is liable to deduct the equalization levy at the rate of 6% from the amount paid or payable to a non-resident in respect of the specified service Extending the Scope of the Equalisation Levy to Ecommerce Transactions that involve the sale of products or the supply of services: The scope of the equalization levy is now increasing by making appropriate adjustments and establishing new provisions in Chapter VIII of the Finance Act, 2016 to include consideration received or receivable by an e-commerce operator from e-commerce supplies or services offered or enabled by it to: a person who lives in India; or   Further, an individual with an IP address in India; or a non-resident under the following circumstances: the selling of advertisements that target customers who live in India or who view the advertisements via IP addresses in India;  Moreover, the selling of data gathered from an Indian resident or from someone who uses an IP address in India. Such a charge will be levied at a rate of 2% and will go effective on April 1, 2020. Further, Section 10(50) is amended as a result to specify that income derived from e-commerce supplies or services subject to the Equalisation levy is excluded from income tax. Important terminology mentioned in Section 164 of the Finance Act 2016 that must be understood: There are two terms that need to be understood, these are: E-commerce supply or services E-commerce operator Let us discuss these terms one by one. E-commerce supply or services: The term “e-commerce supply or services” refers to: Online sale of goods owned by the e-commerce operator; or  Further, online provision of services provided by the e-commerce operator; or  Moreover, online sale of goods or provision of services, or both, facilitated by the e-commerce operator; or   Any combination of the activities listed in clauses I (ii), or (iv) (iii). E-commerce operator: A non-resident who owns or maintains, manages a digital or electronic facility or platform for the online selling of products; the online supply of services, or both will act as an e-commerce operator.The equalization levy will not be paid on e-commerce transactions in the following circumstances:   when the e-commerce operator has a permanent operation in India and the e-commerce supply or services are effectively linking to such permanent establishment; or  if the equalisation charge is levied under section 165 of the Finance Act 2016, such as the equalisation duty on online advertisement services; or The e-commerce operator’s sales, turnover, or gross proceeds from e-commerce supplies or services made, delivered, or facilitated in the previous year were less than Rs. 2 crore. TDS on Electronic Commerce Transactions Pursuant to Section 194-O of the Act: E-commerce operators deduct TDS at 1% of the gross amount of sale or services or both when crediting the amount of sale of goods, services, or both to the account of an e-commerce participant or when making payment to an e-Commerce participant by any other channel, whichever is

Digital is one word that would be synonymous with the current year in India. From GSTN to the e-Way Bill, the finance sector, by far more than any other Industry, went through the most aggressive digital; makeover in recent years. For better or worse, we must now accept the fact that 2022 was the year when India took a major leap towards s digital economy. But the year is not over yet and there is one small but very important event left in the tax calendar i.e. GSTR-9 and GSTR-9C. The GSTR-9 form is an annual return that has to be filed by all registered taxable persons under GST. The GSTR-9C is the GST reconciliation Statement for a particular FY on or before 31st December. The reconciliation must also be certified by a CA for the companies having a turnover of more than 5 crores. What is GSTR 9? GSTR 9 is an annual return that must be filed by all regular taxpayers registered under GST. It provides a summary of the outward and inward supplies made during the financial year and the taxes paid. It also contains information related to Input Tax Credit (ITC) claimed, ITC reversed, and ITC refunded. GSTR 9 is an annual return form that is filed by registered taxpayers who have opted for the regular scheme. It is a consolidation of all the monthly or quarterly returns that the taxpayer has filed during the financial year. GSTR 9 contains details of sales, purchases, and tax paid during the year. The form is divided into six parts, each requiring specific information related to the taxpayer’s business. Who needs to file GSTR 9? Every taxpayer registered under GST, except for those registered under the composition scheme, must file GSTR 9. The following are the categories of taxpayers who must file GSTR 9: Regular taxpayers whose annual turnover exceeds Rs. 2 crores in a financial year. Casual taxpayers and non-resident taxpayers. Input service distributors (ISDs) Those who were previously registered under the Goods and Services Tax (GST) but have since surrendered their registration. What is GSTR 9C? GSTR 9C is a reconciliation statement that must be filed along with GSTR 9. It is mandatory for taxpayers whose annual turnover exceeds Rs. 5 crores in a financial year. GSTR 9C reconciles the information provided in GSTR 9 with the audited annual financial statements of the taxpayer. The reconciliation statement helps to ensure that the information provided in GSTR 9 is accurate and complete. GSTR 9C contains a reconciliation of the taxpayer’s turnover, tax paid, and ITC claimed in the financial year with the audited annual financial statements of the business. It is certified by a Chartered Accountant or a cost accountant, and it is mandatory for taxpayers to file GSTR 9C along with GSTR 9. Who needs to file GSTR 9C? The following categories of taxpayers must file GSTR 9C: Taxpayers whose annual turnover exceeds Rs. 5 crores in a financial year. Those who are required to get their accounts audited under any law. Simple to Understand Comparison Between GSTR 9 & GSTR 9C Points of comparison GSTR-9: Annual Return GSTR-9C: Reconciliation Statement Nature Informational/ a consolidation of all GST returns  Analytical statement on GST returns to be self-certified by CFO/Finance head Who must file GST registered taxpayer GST registered taxpayer to whose aggregate annual turnover is more than Rs 5 crore Not applicable to  – Composition Dealers – Casual Taxable Person (CTP) – Non-Resident Taxable Person (NRTP) – Input Service Distributor (ISD) – Unique Identification Number (UIN) holders  – Online Information and Database Access Retrieval (OIDAR) Service providers  – Persons subject to TCS or TDS provisions Those persons mentioned under the column for GSTR-9 including a registered person whose aggregate turnover in an FY is less than Rs.5 crore Optional for Businesses having less than Rs 2 crore turnover (w.e.f FY 2017-18)   Businesses having less than Rs 5 crore turnover Due date for filing^ 31st December of next FY* 31st December of next FY, either with or after filing GSTR-9* Late fees & penalty From FY 2022-23 onwards- S.No  Turnover limit  Late fee per day Maximum late fee 1 Up to Rs 5 crore Rs 50 (Rs 25 each under CGST and SGST Act) 0.04% of turnover in state/UT (0.02% each under CGST and SGST Act) 2 More than Rs 5 crore and less than Rs 20 crore Rs 100 (Rs 50 each under CGST and SGST Act) 0.04% of turnover in state/UT (0.02% each under CGST and SGST Act) 3 More than Rs 20 crore Rs 200 (Rs 100 each under CGST and SGST Act)  0.50% of turnover in state/UT (0.25% each under CGST and SGST Act)  Up to FY 2021-22-– Late fees of Rs 200 per day of delay subject to a maximum cap of an amount at 0.50% (0.25% each under CGST and SGST) of total turnover in respective State/UT until 31st March 2023. The CBIC has notified vide 07/2023 dated 31st March 2023 to waive off late fee in excess of Rs.20,000 (Rs.10,000 each under CGST and SGST laws) for delayed filing of GSTR-9 for years 2017-18  up to 2021-22 if filed between 1st April 2023 to 30th June 2023. No specific provision, Hence, subject to a general penalty of Rs 25,000 Filing of the return On GST portal or through facilitation centre On GST portal or through facilitation centre at the time of or after filing GSTR-9 Format of the return Consolidated summary details of the  – Turnover – ITC and tax paid – Late fees paid in GST returns filed during the FY – Amendments made between April to 30th November of next FY Also, below details must be declared wherever applicable:  – Demands/ refunds – Supplies from composition dealers – Job works – Goods sent on an approval basis – HSN wise summary of sales and purchases – Late fees payable Part-A -Reporting of reconciliation needed between turnover, tax paid and ITC. Report on Auditor’s recommendation of any additional tax liability.  Part -B – Self-certification by CFO/Finance head. Who must certify/ attest No certification required by CA/CMA; however it must be attested by the taxpayer using a digital signature CFO/Finance

The official GST website of the government is www.gst.gov.in, also known as the GST Portal. It helps taxpayers with a variety of programs, including getting GST registration, filing GST returns, applying for refunds, and cancelling their GST registration. The fact that the tax administration must rely heavily on technologies is an essential part of the GST regime. Taxpayers will no longer be expected to contact tax departments in person for reviews or to file applications or returns, despite the fact that facilitation centres are located across India. What is the GST portal? GST portal is a PAN-India government website for GST compliance. The GST government website or portal is hosted at https://www.gst.gov.in/. The government portal for GST is a website where a taxpayer can carry out all the compliance activities under GST before and after GST login. They can take actions such as GST registration, return filing, payment of taxes, application for a refund, etc., What is the GST e-way bill system? e-Way bill system or the e-way bill portal is accessible at https://ewaybillgst.gov.in/. An electronic way bill or e-way bill refers to a document that transporters must carry while moving goods from one place to another where the consignment value exceeds Rs.50,000. It is a document that tracks the movement of goods under the GST law. All e-way bills are generated on the e-way bill system to obtain a unique e-way bill number for every invoice. The transporter, recipient and supplier use this e-way bill for moving the goods from the origin to the destination within the validity period of the e-way bill. Before GST, way bills were generated in every state, whereas with the implementation of GST, e-way bills are common across all states or Union Territories. Registration on GST Services Login Portal Go to the GST official website and click on ‘Register Now’ under ‘GST Practitioners.’ Select ‘New Registration’, after which you will be asked to provide the relevant details and documents. Once the details have been filled in, you will receive an OTP. Enter the received OTP into the asked box and click on proceed. Once the application is submitted, you will be given an acknowledgement number. The application will further be processed when assigned with a GST number, User ID, and password. You can use this to log in to GST. Track Registration Application Status Navigate to the GST website. Select registration under the services tab and click on track application status. Select ‘ARN’ and click on the search button. When you follow the instructions you can view the status of your registration application. Services to Avail on the GST Login Portal Registration To begin with, the services tab includes a connection to register for a new GST registration. If a person’s turnover exceeds Rs 20 lakh and he sells both products and services, he must apply for GST (Rs 10 lakh for NE and hill states). The capital for a sole supplier of products is Rs 40 lakh, subject to certain conditions. Payments The next tab you’ll come across is “Payments.” A challan can be created and paid by any GST registered taxpayer. There’s even a way to keep track of your progress. User Services  The Holiday List Generation of a User ID for an Unregistered User Locate a GST Practitioner Refunds This choice allows the customer to keep track of the status of his refund submission. e-Way Bill System The e-way bill system tab will take you to the site for e-way bills. On the e-way bill portal, you can even find FAQs and the user manual. Filing Clarifications, GST Challan Development, Locating a GST Practitioner, and Tracking Refund Application Status Using the ARN Number are all included in this section. Other Options on the GST Portal Offline Tools GST Statistics Search Taxpayer Help Taxpayer Facilities e-InvoiceAccording to the GST rule, the following persons must enroll under the taxation system’s regime: News  Updates Important Dates Popular Help Topics FAQs What is the GST Login Portal? The GST Login Portal is an online platform provided by the Goods and Services Tax (GST) department for taxpayers in India to manage their GST compliance. It allows users to file returns, pay taxes, track transactions, and access various GST-related services. Who can access the GST Login Portal? The GST Login Portal can be accessed by registered taxpayers, including individuals, businesses, and organizations that are registered under the GST regime. Tax professionals, such as chartered accountants and tax consultants, can also access the portal on behalf of their clients.

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.  Overview GST Registration online Since its introduction on 1 July 2017, the Goods & Services Tax (GST) has been mandatory for all service providers, traders, manufacturers, and even freelancers in India. The GST system was implemented to replace Central and state-level taxes such as Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT, making the tax process more streamlined. The GST registration charges vary depending on the type of business and turnover. For those taxpayers whose annual turnover is less than 1.5 crore, the GST framework provides an option for a composition scheme. This scheme allows them to undergo simplified GST procedures and pay taxes at a predetermined rate according to their turnover. The GST mechanism operates throughout various stages of the supply chain. This includes acquiring raw materials, production, wholesale, retail, and the eventual sale to the end consumer. Notably, GST is imposed at every one of these steps. For example, when a product is produced in West Bengal and then used in Uttar Pradesh, the GST revenue generated is allocated entirely to Uttar Pradesh, emphasizing the consumption-based nature of GST. 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 Key Components of GST Registration Central Goods and Services Tax (CGST): This tax is levied by the Central Government on the supply of goods and services within a particular state. CGST applies to transactions carried out entirely within the boundaries of one state. State Goods and Services Tax (SGST): SGST is charged by the State Government on the supply of goods and services within its jurisdiction. Similar to CGST, SGST is also limited to transactions happening within a specific state. Integrated Goods and Services Tax (IGST): This tax is imposed by the Central Government on the supply of goods and services that occur between different states or between a state and a Union Territory. IGST is relevant for transactions where goods or services cross state or Union Territory boundaries. GST Registration Turnover Limit Service Providers: Any person or entity who provides service of more than Rs.20 lakhs in aggregate turnover in a year is required to obtain GST registration. In special category states, the GST turnover limit for service providers has been fixed at Rs.10 lakhs. Goods Suppliers: As per notification No.10/2019 any person who is engaged in the exclusive supply of goods whose aggregate turnover crosses Rs.40 lakhs in a year is required to obtain GST registration. To be eligible for the Rs.40 lakhs turnover limit, the supplier must satisfy the following conditions: Should not be providing any services. The supplier should not be engaged in making intra-state (supplying goods within the same state) supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripur and Uttarakhand. Should not be involved in the supply of ice cream, pan masala or tobacco. If the above conditions are not met, the supplier of goods would be required to obtain GST registration when the turnover crosses Rs.20 lakhs and Rs.10 lakhs in special category states. Special Category States: Under GST, the following are listed as special category states – Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand. Aggregate Turnover: Aggregate turnover = (Taxable supplies + Exempt Supplies + Exports + Inter-State Supplies)*(Taxes + Value of Inward Supplies + Value of Supplies Taxable under Reverse Charge + Value of Non-Taxable Supplies). Aggregate turnover is calculated based on the PAN. Hence, even if one person has multiple places of business, it must be summed to arrive at the aggregate turnover Advantages of GST Registration for Businesses Legal Compliance: Ensures that businesses remain compliant with tax regulations, thus avoiding any potential penalties. Input Tax Credit: Businesses can claim credits for the GST they’ve paid on purchases, which can then be set off against the GST charged on sales, leading to a reduction in tax liability. Inter-State Trade Ease: Encourages businesses to transact across state boundaries without facing tax-related challenges. Elimination of Cascading Effect: By removing the effect of tax being levied on an already taxed amount, the overall cost of products or services is reduced. Competitive Edge: Being GST compliant can instil trust in potential customers, opening up more business opportunities. Access to Larger Markets: Major corporations often prefer collaborating with GST-registered vendors. Optimized Cash Flow: Efficient management and lower tax liability can enhance the cash flow within a business. Enhanced Credit Rating: Maintaining a consistent and positive GST compliance record can boost a business’s credit profile. Legal Safeguard: A GST registration protects businesses and ensures their rights are upheld. Simplified Compliance: The GST process is streamlined, enabling businesses to file returns and make payments online easily. Transparent Operations: Ensures businesses maintain accurate records, promoting a sense of trustworthiness and professionalism. GST Registration Documents Requirements Sole proprietor / Individual PAN card of the owner Aadhar card of the owner Photograph of the owner (in JPEG format, maximum size  100 KB) Bank account details* Address proof** LLP and Partnership Firms PAN card of all partners (including managing partner and authorized signatory) Copy of partnership deed Photograph of all partners and authorised signatories (in JPEG format, maximum size

The Goods and Services Tax, sometimes known as the GST, is a tax that was recently added to the Indian tax system and is assessed on the delivery of goods and services. GST Registration is necessary for the proper operation of the firm. It takes about 3-6 working days to obtain GST Registration. Any company that operates without GST is breaking the law and faces consequences. The central government would collect the CGST or SGST based on the transaction under the GST statute. Both CGST and SGST are collected when a supply of goods or services occurs within the state; this type of transaction is referred to as an intrastate transaction.  What is the Goods & Services Tax? The Goods and Services Tax (GST) is a comprehensive tax that is levied on the supply of goods and services. It is a dual-level tax system, comprising the Central GST (CGST) and State GST (SGST). It has replaced the multiple taxes previously levied by the Central and State Governments of India.Some of the biggest benefits of GST for all kinds of industries and businesses have been: What is the Central Goods and Services Tax (CGST)? The Indian government imposes the Central Goods and Services Tax on all transactions involving products and services within the state. It is a tax imposed on all transactions that take place within the state. The CGST has taken the place of all previous central taxes, including the central excise charge, service tax, and customs duty. Both taxes are imposed based on the commodities, and the rates for the CGST and SGST are the same. Illustration: A has to pay two taxes if he wants to sell a product to B, who lives in the same state. The SGST rate will be 9% in addition to the 9% CGST rate. GST is not collected on products consumed in the state in which they are produced. The manufacturing tax levied by the state is then transferred to the consuming state by the union government. Calculation of CGST You are a business owner and you charge ₹12,000 for a product. Given that the product’s GST rate is 18%, the total GST comes to ₹2,160 (18% of ₹12,000). Half of the total GST for sales within the state is made up of the CGST and SGST (State GST). Hence, half of ₹2,160, or ₹1,080 (9% of ₹12,000), is the CGST. What is the State Goods and Services Tax (SGST)? The state goods and services tax, or SGST for short, is one of two taxes imposed on intrastate sales of goods and services. The state in which the items are bought and sold is subject to SGST. The current state taxes, such as the VAT, sales tax, entertainment tax, luxury tax, entry tax, state cess, and surcharge on any form of transaction involving goods and services, would be replaced by this new one. The only entity that designs the revenue obtained under the SGST is the state government.   Illustration: Goods sold by Arun from Uttar Pradesh to Lakshay from Uttar Pradesh will be subject to 18% GST, which also includes 9% CGST and 9% SGST Calculation of SGST Assume you run a bakery in Delhi and you charge a customer in the same state ₹10,000 for a cake. Cake is subject to a 5% GST rate, which comprises both SGST and Central GST (CGST). The SGST rate in this scenario would be 2.5%, or half of the 5% overall GST rate. Thus, in this transaction, you would charge the client ₹250 for SGST, which would be collected by the state government. What is the difference between CGST and SGST? Difference CGST GST Meaning The Central Goods and Service tax under GST has replaced the existing tax services tax, excise tax, etc. SGST means the state goods and service tax that has replaces the existing tax like the sales tax, luxury tax, etc. This tax is levied by the state government. Collected by Central Government State Government Benefiting authorities Central Government State Government Applicable on transaction Intrastate (Within the state) Intrastate (Within the state) Registration No registration, until the turnover, is exceeding Rs.20 lakh (For northeastern states it is Rs.10 lakh) No registration, until the turnover, is exceeding Rs.20 lakh (For northeastern states it is Rs.10 lakh) Composition scheme The dealer can use the benefits up to Rs.75 lakh under the composition  scheme The dealer can use the benefits up to Rs.75 lakh under the composition scheme FAQs What kind of tax is GST? The majority of products and services supplied for domestic use are subject to an indirect tax known as the products and Services Tax (GST). What are the benefits of getting GST registration? Obtaining GST registration has several advantages, including unrestricted interstate sales and the ability to claim the input tax credit. For small firms, a composition plan is an additional option that offers reduced tax liability, increased working capital, and fewer compliances. The GST tax system has significantly lessened cascading.

The structure of indirect taxes in India up to 30-6-2017 was based on three lists in the Seventh Schedule of the Constitution of India, which came into effect on 26-1-1950. These provisions were based on the situation prevailing in 1935 and were based on the Government of India Act, 1935. Due to changes in the functioning of society, this structure had become outdated. Most of the countries have moved towards the common tax structure long ago. However, for India, GST is the tax for the twenty-first century.  The foundation of GST in the country was laid down in the Budget Speech of 28th February 2006 by the then Finance Minister. Since then, there has been a constant endeavor for the introduction of the GST in the country whose culmination has been the introduction of the Constitution (122nd Amendment) Bill in December 2014. What is GST? The full form of GST is Goods and Services Tax. It was first introduced in the Budget Speech presented on 28th February 2006. It laid the foundation for a complete reform of India’s indirect tax system. Finally implemented on 1st July 2017 as the Goods and Services Tax Act, the indirect taxation system thus went through a chain of amendments since its inception. With this tax reform, GST replaced multiple indirect taxes that were levied on different goods and services. The Central Board of Indirect Taxes and Customs (CBIC) is the regulatory body governing all changes and amendments regarding this tax. GST Meaning and Scope GST definition is easy to decode. It is a destination-based, multi-stage, comprehensive tax levied at each stage of value addition. Having replaced multiple indirect taxes in the country, it has successfully helped the Indian Government achieve its ‘One Nation One Tax’ agenda. The tax is levied on goods and services sold within India’s domestic boundary for consumption. Implemented by a majority of nations worldwide with respective customisations, the tax has been successful in simplifying the indirect taxation structure of India. GST is levied on the final market price of goods and services manufactured internally, thereby reflecting the maximum retail price. Customers are required to pay this tax on a purchase of goods or services as an inclusion in their final price. Collected by the seller, it is then required to be paid to the government, thus implying the indirect incidence. The GST rates on different goods and services are uniformly applied across the country. Goods and services have, however, been categorised under different slab rates for tax payment. While luxury and comfort goods are categorised under higher slabs, necessities have been included in lower and nil slab rates. The main aim of this classification is to ensure the uniform distribution of wealth among residents of India. History of GST and GST Information Back in 2000, the then Prime Minister of India introduced the concept of Goods and Services Tax. He also formed a committee to draft new indirect tax law. It, however, took 17 more years for its implementation. Meanwhile, the bill went through multiple introductions, amendments and rescheduling. 2000 – Committee set up by the PM for drafting Goods and Service Tax law for India. 2004 – A task force reported a need to implement this law and improve the indirect tax system in India. 2006 – Goods and Services Tax introduction scheduled on 1st April 2010 by the Finance Minister of India. 2007 – Decision to phase out Central Sales Tax (CST). Consequently, CST rates were reduced to 3% from 4%. 2008 – GST’s dual structure was finalised by the EC for separate legislation and levy. 2010 – Postponement of GST introduction due to structural and implementation hurdles. A project launched for the computerisation of commercial taxes. 2011 – Introduction of Constitution Amendment Bill for enabling the Goods and Services Tax Law. 2012 – Discussion regarding the tax initiated by the Standing Committee; stalled due to lack of clarity regarding Clause 279B. 2013 – GST’s report presented by the Standing Committee. 2014 – The Finance Minister of India reintroduces the Goods and Services Tax Bill to Parliament. 2015 – The Lok Sabha clears the bill, but it is stalled in the Rajya Sabha. 2016 – Goods and Services Tax Network (GSTN) went live. The law’s amended model passed in both Houses of Parliament and received a nod from the President of India. 2017 – The Cabinet approves four supplementary bills on GST cleared by the Lok Sabha and the Rajya Sabha. The Goods and Services Tax Law was implemented on 1st July 2017. List of Taxes Subsumed after GST Implementation Good service tax was introduced as a comprehensive indirect tax structure. With this introduction, the government aimed to consolidate all indirect taxes levied under one umbrella. Thus, except for customs duty that is levied on the import of goods, Goods and Services Tax replaced multiple indirect taxes. This introduction helped overcome the limitations of its previous indirect tax structure regarding implementation and inefficiency in the collection process.  Following is the list of indirect taxes that were subsumed by Goods and Service Tax- Indirect Taxes Imposed by the Central Government Central Sales Tax Service Tax Central Excise Duty Excise Duty (Additional) Countervailing Duty or Additional Customs Duty Special Additional Customs Duties Indirect Taxes Imposed by the State Government State VAT Entry Tax and Octroi Duty Luxury Tax Amusement and Entertainment Tax Taxes on Advertisements Goods and services related to cess and surcharges Purchase Tax Tax on betting, lottery and gambling. Objectives of GST The key objectives of GST are- ‘One Nation, One Tax’ GST took the place of many indirect taxes that existed before. It was introduced with a core motive and policy called the ‘One Nation, One Tax’. It was introduced as so to provide set tax rates for a service/product that every state would follow. It even simplified administering taxes and compliances. To Subsume Indirect Taxes in India    To create a centralised and unified tax system on goods and services, GST was introduced in India. Under its laws, the majority of indirect taxes were subsumed into one to simplify administration. To Restrain Tax Evasion Prior to the introduction of GST, the tax evasion rate was very high. In

The full form of GST is “Goods and Services Tax”. GST is a comprehensive indirect tax introduced in India on 1st July 2017, replacing the previous multiple indirect taxes such as excise duty, service tax, VAT, and others. GST is a destination-based tax levied on the supply of goods and services. In India, It is a value-added tax that is collected on the value added at each stage of production or distribution, with credit allowed for any tax paid on purchases made for business purposes. GST aims to create a simplified, single tax system that eliminates the cascading effect of multiple taxes and promotes ease of business in India. What is meant by direct tax? Direct Tax is imposed on the income of an assessee (individual or company or firm or HUF or any other person). The amount of tax payable varies on the income earned by the individual from various sources such as salary, house rent income, Bank FD interest, etc. So, the more you earn, the more tax you pay to the Government which essentially means the rich pay more tax in comparison to the poor.  Hence, the tax incidence falls on the single person or the assessee and such incidence or tax-paying responsibility cannot be passed onto any other person. The following is a list of direct taxes relevant in India: Income Tax Wealth Tax (Abolished and revoked later) Estate Tax What is meant by indirect tax? Indirect tax is not imposed directly on the income of the persons, as mentioned above. Instead, it is imposed on goods and services transacted which, in turn, increases the cost or MRP of those goods and services.   Unlike a direct tax, indirect tax should be borne by the end customer, rich and poor are treated alike.  There are many indirect taxes. Some of these are levied by the Central Government whereas some are levied by the State Government making the indirect tax system an extremely complicated system. The following is the list of indirect taxes, currently in India: Goods and Services Tax (GST) Customs duty Excise duty (on Petrol, diesel, natural gas, alcohol) Central Sales Tax (relevant for certain goods only) Securities Transaction Tax (STT) Stamp Duty Entertainment Tax GST was introduced to replace multiple indirect taxes levied by State and Central Governments in order to simplify the indirect tax system. It has replaced almost 17 of the existing state and central indirect taxes such as central excise duty, additional customs duty, VAT, entertainment tax, service tax etc. Why was GST introduced in India? GST, or Goods and Services Tax, was introduced in India to create a single, comprehensive indirect tax system to replace the complex and multi-layered indirect tax structure that existed earlier. The following were the main reasons for introducing GST in India: To eliminate the cascading effect of taxes: Under the previous tax regime, taxes were levied on top of taxes, resulting in a cascading effect that increased the cost of goods and services. GST, with its seamless credit mechanism, eliminates this cascading effect, making goods and services more affordable. To simplify the tax structure: The previous tax regime had a complex and multi-layered tax structure that was difficult to understand and comply with. GST, with its simplified tax structure, reduces the compliance burden for businesses and makes it easier for them to understand and pay taxes. To promote ease of doing business: The introduction of GST has made it easier for businesses to operate across different states in India. Under the previous tax regime, businesses had to comply with different tax laws in different states, which increased their compliance burden. GST has created a uniform tax regime across India, making it easier for businesses to operate. To boost economic growth: GST is expected to boost economic growth by enhancing tax compliance, reducing tax evasion, and promoting the formalization of the economy. It is also expected to increase tax revenue for the government, which can be used for infrastructure development and other social welfare initiatives. GST meaning in various Indian languages GST meaning in Arabic ضريبة السلع والخدمات GST meaning in Bengali পণ্য ও পরিষেবা কর GST meaning in English Goods and Services Tax GST meaning in Gujarathi સામાન અને સેવાઓ કર GST meaning in Hindi वस्तु एवं सेवा कर GST meaning in Kannada ಸರಕು ಮತ್ತು ಸೇ ವಾ ತೆರಿಗೆ GST meaning in Malayalam വസ്തുക്കളും സേവന നികുതിയും GST meaning in Marathi वस्तू आणि सेवा कर GST meaning in Nepali सामान र सेवा कर GST meaning in Punjabi ਗੁਡਸ ਐਂਡ ਸਰਵਿਸਿਜ਼ ਟੈਕਸ GST meaning in Sindhi سامان ۽ خدمتون ٽيڪس GST meaning in Tamil பொருட்கள் மற்றும் சேவைகள் வரி GST meaning in Telugu వస్తువులు మరియు సేవల పన్ను GST meaning in Urdu سامان اور خدمات ٹیکس FAQs What Are the Benefits of the GST? The GST can be beneficial as it simplifies taxation, reducing several different taxes into one straightforward system. It also is thought to cut down on tax avoidance among businesses and reduces corruption. Are VAT and GST the Same? Value-added tax (VAT) and goods and services tax (GST) are similar taxes that are levied on the sale of goods and services. Both VAT and GST are also indirect taxes, which means that they are collected by businesses and then passed on to the government as part of the price of the goods or services. However, there are some key differences between the two. VAT is primarily used in European countries and is collected at each stage of the production and distribution process, while GST is used in countries around the world and is collected only at the final point of sale to the consumer. VAT is generally applied to a wider range of goods and services than GST, and the rates of VAT and GST can vary depending on the type of goods or services being sold and the country in which they are sold.

GSTR-3B is the summary return that taxpayers must file regularly to show details of sales, ITC claims, tax liability, refunds, etc recorded on their GSTIN. The implementation of the GST regime has successfully eliminated the cascading taxation effect and has simplified the overall process. Since its introduction, several GST returns forms have been introduced catering to specific purposes. GSTR-3B is one of such vital return form. What is GSTR 3B? GSTR-3B is fundamentally a monthly self-declaration filed by a registered dealer in addition to GSTR 1 and GSTR 2 forms. It is a collected summary of inward and outward supplies that was introduced by the Government of India to provide relaxation to businesses that transitioned to the GST regime. In other words, it is a simplified method that helps to declare the summary of GST liabilities for a given tax period. It must be noted that one cannot amend GSTR-3B and dealers must file separate GSTR-3B for each of their GSTIN. They must make it a point to pay the GSTR-3B’s tax liability by the last date of filing GSTR-3B for the same month. All GST registrants must file GST return 3B including ‘NIL’ returns. Nonetheless, a few registrants do not need to file this self-declaration. They are – Suppliers of OIDAR Non-resident taxable individuals Input service distributors and composition dealers Small taxpayers Non-resident taxable individuals Who should file GSTR 3B? Every person who is registered under GST must file GSTR-3B. However, the following registrants do not have to file GSTR-3B Taxpayers registered under the Composition Scheme Input service distributors Non-resident suppliers of OIDAR service Non-resident taxable persons Late Fee & Penalty for GSTR-3B A late fee is charged for filing GSTR-3B of a tax period after the due date. It is levied as follows: Rs. 50 per day of delay Rs. 20 per day of delay for taxpayers having nil tax liability for the month In case the GST dues are not paid within the due date, interest at 18% per annum is payable on the amount of outstanding tax to be paid. Due Dates for GSTR-3B Filing GSTR-3B return is due on the 20th of each month. How to File Form GSTR-3B? Step 1 – Login to GST’s official portal. Step 2 – Navigate to the ‘Services’ tab. Step 3 – Click on ‘Returns’. Step 4 – Click on ‘Returns Dashboard’. Step 5 – On being directed to the ‘File Returns’ page, select the ‘Financial year’ from the drop-down menu. Step 6 – Select the applicable ‘Return Filing Period’ and click the ‘Search’ button. Step 8 – Navigate to option marked GSTR 3B monthly returns. Step 9 – Click on the button – ‘Prepare Online’ and enter the required details. Step 10 – Click on the ‘NEXT’ button. To file ‘NIL’ returns, individuals need to select ‘Yes’ in the very first question and continue with remaining ones. Step 11 – Enter applicable values in displayed tiles. Fill in the interest and late fees if applicable. To make required modifications in each tile, individuals can click on either the ‘ADD’ or ‘Delete’ option. Step 12 – Click the ‘Confirm’ button once. Step 13 – Click on the ‘SAVE GSTR 3-B’ button. Step 14 – Click on the ‘SUBMIT’ button after verifying and confirming all the entered details. One can look up the status of this GSTR on the top right corner of the page. Step 15 – To view the draft GSTR-3B return click on ‘Preview Draft GSTR-3B’. Once the return is submitted successfully, the ‘Payment of Tax’ tile will be enabled. Taxpayers can click on the ‘Check Balance’ button to view the cash and credit balance. Step 16 – From the drop-down, choose option ‘Authorised Signatory’. Step 17 – Click on ‘FILE GSTR-3B WITH DSC/ FILE GSTR-3B WITH EVC’ option. Step 18 – Click on the ‘Proceed’ button. What are the Details Featured in GSTR 3B? This form comprises 6 tables and requires taxpayers to provide specific information. This table focuses on the details featured in GSTR 3B – S.N.  Tables  Details contained  a) Table – 1  Inward supplies and outward supplies liable to reverse charge.  b) Table – 2  Interstate supplies directed towards unregistered individuals, UIN holders and composition dealers. c) Table – 3  Input Tax Credit d) Table – 4  Nil-rated, exempt and GST-free inward supply details.  e) Table – 5  Payment of tax f) Table – 6  TCS/TDS credit  What is the Relationship between GSTR 2A and GSTR 3B? GSTR-3B and GSTR-2A must be reconciled. The reasons for it are given below in pointers – Through such reconciliation, room for claiming ITC based on fake invoices is eliminated. It gets rid of errors like recording an invoice more than once or missing its details entirely. One can quickly identify and rectify details provided in either GSTR-1 or GSTR-3B. In case outward supplies were not recorded in GSTR-1, it can be communicated to the concerned supplier to avoid discrepancy. Input Tax Credit reconciliation as per GSTR-3B and GSTR-2A is required to file an annual return in GSTR-9. Nonetheless, there are cases of non-reconciliation of GSTR-3B and GSTR-2A. The same can be due to any of these following reasons – Input Tax Credit claim was for Integrated Goods and Services Tax on imported goods or services. Input Tax Credit claim was in the fiscal year in which goods or services were received. Transitional credit claim was under TRAN-I and II. ITC was availed on the paid GST amount on RCM basis. The primary reason behind non-reconciliation is because a corresponding GSTR-1 was not filed or Input Tax Credit remains unclaimed in the meantime. Notably, if any discrepancy related to the claim of ITC is noticed in GSTR 2A and GSTR 3B taxpayers have to pay the wrongly claimed amount along with interest. The best way to avoid discrepancy in these details of both GSTR-3B and GSTR-2A is to provide accurate information and eliminate all possible errors before submitting them. FAQs Should I provide invoice-wise details on the return? Only consolidated numbers are required in GSTR-3B. Invoice-wise breakup is not required. What

The GST (Goods and Services Tax) regime was introduced on July 1, 2017. It is one of the most significant and revolutionary indirect tax reforms in India post-independence. GST subsumed a number of indirect taxes levied by the Central and State Governments. Taxes such as Central Excise duty, Service Tax, VAT, Purchase Tax, Central Sales Tax, Entry Tax, Local Body Taxes, Luxury Tax, etc.are now non-existent. What is GST? Goods and Services Tax (GST) is a value-added tax levied on the supply of goods and services for domestic consumption. GST is, therefore, an all-encompassing, single indirect tax law for the entire country. This tax is included in the final price of a product. A customer who buys said product pays its price inclusive of the GST. The business or seller then forwards its GST portion to the government. The Central Government of India levies this tax. In the case of intrastate transactions, this tax is distributed between the central and state government under CGST and SGST. Framework under the Goods and Services Tax: Under the GST law taxes can be further classified into these four types: 1) Central goods and services tax (CGST) 2) State goods and services tax (SGST) 3) Union territory goods and services tax ( UTGST) 4) Integrated goods and services tax (IGST) What is Central Goods and Services Tax (CGST) Central Goods and Services Tax or CGST is the indirect tax levied by the Central Government. It is levied on the transaction of goods and services which are undertaken within the state i.e. intrastate. The tax collected under the head “CGST” is payable to the central government treasury. The CGST is charged to compensate the central government for previously existed indirect taxes such as Central Excise Duty, Service Tax, Duties of Custom, Surcharges, Cesses, etc. The CGST is charged along with SGST or UTGST and at the same rates. This is done as per the Dual GST model followed in India, where both central and state governments have their separate taxation legislatures. What is State Goods and Services Tax (SGST)? State Goods and Services Tax or SGST represents the tax imposed by the State Government. SGST is levied on intrastate sales of goods and services, i.e., sales made within a state. SGST is charged along with and at equal rates of CGST on a good or service. All the states of India charge this tax but has also been adopted by two union territories of Puducherry and Delhi, because both of these union territories have their legislative assembly and council. The tax revenue under SGST goes to the State Government treasury or the eligible Union Territory where the consumption of goods or services has taken place. What is the Union Territory Goods and Services Tax (UTGST)? Union Territory Goods and Services Tax or UTGST is similar to SGST. The only difference is that the tax revenue goes to the treasury for the respective administration of the union territory where the goods or services have finally been consumed. There is a key difference between union territory and states. The Union Territory directly comes under the supervision of the Central Government and does not have its own elected government as in the case of States. UGST is also charged at the same rates of CGST. But, amongst UTGST or SGST, only one at a time shall be levied together with CGST in each case. Currently, there are 8 union territories in India: Chandigarh Lakshadweep Dadra and Nagar Haveli & Daman and Diu Ladakh Andaman and Nicobar Islands Delhi Puducherry Jammu and Kashmir But out of these Delhi and Puducherry levy SGST and not UTGST because they have their own elected members and Chief Minister. Hence, they function as partial – states. As the SGST Act cannot be applied to a union territory that does not have its legislature.  What is Integrated Goods and Services Tax (IGST)? IGST is levied on all interstate supplies of goods and services by the Central Government, unlike, CGST, SGST, & UTGST, which are levied upon the supply of goods or services within a state. IGST has provided a standardization to taxation on the supply of goods and services made outside the state. This applies both to a supply made outside the state and outside the country. The rate of IGST would always be approximately equal to the CGST rate plus the SGST rate. For Example:- Now, let’s take a situation to understand all the taxes under GST in a nimble way; Suppose the sale of goods is worth Rs 10 lakhs. It attracts GST @ 18%. Consider the computation GST payable under relevant heads in the following scenarios The sale is done within the same state i.e. intrastate sales Sale is done within the union territory i.e. intrastate sales The sale is done to another state i..e interstate sales Situation Analysis Taxes Applicable Sales within the same state Intra-state Supply CGST @ 9% +SGST @ 9% Sales within the same union territory Intra-state Supply CGST @ 9% +UTGST @ 9% Supply to another state Inter-state Supply IGST @ 18 Question Let us assume that Goods worth Rs. 20,000 are sold by Shubham from Gujarat to dealer Rahul in Gujarat Dealer Rahul resells such goods to trader Mahesh in Uttar Pradesh for Rs. 22000 Trader Mahesh now sells such goods to consumer XYZ in Uttar Pradesh for Rs 29,000 Solution Since Shubham sells goods to Rahul in Gujarat, the supply takes place in the same state (Gujarat in this case). Hence, this is like Intra state supply. Further, for this Intra State transaction between Shubham and Rahul, CGST@9% and SGST@9% each shall be applicable. In the second instance, dealer Rahul resells such goods in different states i.e. Uttar Pradesh to Mahesh. This is the case of interstate supply. Hence, IGST @18% shall be calculated on this particular transaction between Rahul and Mahesh. And at the end, Mahesh sells such goods to end users in the same state of Uttar Pradesh to XYZ. Since supply

In the Indian economic landscape, property rental holds significant weight, both as a vital income source for individuals and businesses, and as an unavoidable expense component for countless firms. The spectrum of rental scenarios is broad, spanning from residential leases for personal use to commercial property rentals for business purposes. In this complex setup, an important but perplexing element often comes into play – the Goods and Services Tax (GST). GST Impact on Renting Out Property Property rental, through the lens of the GST Act, is treated as a supply of services. However, not all property leases attract GST. Notably, if a residential property is rented out purely for dwelling purposes, it remains exempted from GST. This exemption is a systematic relief for countless tenants seeking a home, aiming to simplify their tax landscape. At the opposite end of the spectrum, commercial, industrial, or any property rented out for business purposes (either partially or wholly) faces the levy of GST. The use of property in this manner qualifies as the supply of services, calling for GST at the prevailing rate of 18%. Tax on Rental Income in the Pre-GST era During the pre-GST era, the landlord had to obtain a service tax registration if their total taxable services (including the rental income from all properties) exceed Rs.10 lakh per year. As long as the rental income (from all the properties that have been rented out) does not exceed Rs.10 lakh per year, the landlord would not be attracted to service tax. Under the previous tax regime, commercial properties alone, that were let out would attract service tax. This applies even if a residential property is used for commercial purposes. Service tax was levied at 15% of the rent, for commercial properties. Moreover, the rental income from residential properties did not attract service tax. Does renting out a property attract GST? According to the GST Act, renting out an immovable property would be treated as a supply of services. GST, however, will be applicable only to certain types of rent such as: When a property is given out on lease, rent, easement, or licensed to occupy When any property is leased out (or let out) including a commercial, industrial, or residential property for business (either partly or wholly) This type of renting is considered a supply of services and would thus attract tax. When you rent out a residential property for residential purposes, it is exempt from GST. Any other type of lease or renting out of the immovable property for doing business would attract GST at 18%, as it would be treated as a supply of service. No GST on residential property rented in personal capacity for use as a residence In the 48th GST Council meeting, the Council clarified that no GST is payable where a residential dwelling is rented to a registered person if the same is rented it in their personal capacity and for use as their own residence. This means that where a registered person is a proprietor of a proprietorship firm and they have rented out a residential property in their personal/own capacity (and not that of the proprietorship) and the property is for use as their own residence, then no GST will be applicable. GST Registration Requirements for Property Rented to Businesses Navigating the property rental landscape becomes particularly intriguing when the lessor steps into the business sphere. A fundamental question arises: “Who needs to register under GST when property is rented out to businesses?” In essence, the onus is on the property owner to register under GST if the total income—comprising of both rent from the leased property and any other business revenue—surpasses the exempted threshold of Rs 20 lakh annually. This limit is elevated from the former service tax regime’s ceiling of Rs 10 lakh, bringing a breather to many landlords who might otherwise have been encumbered by compliance requirements. How to check Place of Supply for charging CGST, SGST or IGST The landlord or owner of the property can be registered in a state different from the state in which the property is situated. It is left to the option of the landlord. They must identify place of supply to decide if CGST and SGST is charged or IGST applies. Following are some of the cases compiled for you. Scenario 1: One case has the taxpayer located in a state different from the state in which the rented property in situated. The place of supply shall be the place of property. Accordingly, it is interstate supply and IGST shall be charged. For example, If Mr. ABC, registered under GST in Bangalore, has given a commercial property on rent in Haryana, then an IGST at 18% would be charged. He doesn’t have to also register under GST in Haryana. Scenario 2: Both the landlord and tenant are registered in the same State in which the property is situated. If the landlord is registered under GST in the same state in which the property is situated, then both CGST and SGST at 9% each would be charged. For instance, If Mrs XYZ who is registered in Maharashtra gives her commercial property in Hyderabad on rent, then CGST and SGST of 9% each would be charged. Scenario 3: Landlord is registered under GST in the same state where the property is located but the tenant is registered in another state If the landlord has taken GST registration in the same state in which the property is situated, then it is a case of intrastate transaction. So, both CGST and SGST would be charged irrespective of the location of GST registration of the tenant. In such cases, the tenant cannot take the input tax credit of CGST and SGST if he is not registered in the same state where the property is situated. For instance, Mr. PQR from Kochi travels to Bhopal for a client meeting and stays in ABC Hotel. He books a room and pays rent of Rs. 15,000. The owners of ABC Hotel are registered in Bhopal and the hotel is also