Are you new to GST? Here’s GST explained for Amateurs

The Goods and Services Tax (GST) came into full effect in July, 2017 and has managed to replace numerous taxes under the old tax regime. These taxes are Central Excise, Service Tax, VAT, Luxury, and many others. Given how the GST Act has been implemented, and you have to run your business as per the GST rules, it is imperative that you educate yourself on the different types of tax and the ones you are liable to pay.

Which Tax should I pay?

There exist three types of taxes – Central Goods & Services Tax (CGST), State Goods & Services Tax (SGST), and Integrated Goods & Services Tax (IGST). You are liable to make one of the mentioned GST tax payments depending on the type of supply you carry out.

Here are the two factors you need to consider:

Intra-State supply of goods or services

This means the supplies that you make within the same state. In Intra-State transactions, a seller is required to collect both CGST and SGST from the consumer. The CGST is passed on to the Central Government while the SGST is passed on to the State Government.

Inter-State supply of goods or services

An inter-State supply of goods and services refers to a supply that occurs between states. In Inter-State transactions, you are required to pay IGST to the Central Government.

What are the benefits of GST?

Here are a few benefits GST you need to be aware of:

  • The taxpayer may sign and file taxes, and file GST returns through the use of the GST portal online without reporting to the authorities. The GST portal has to its credit, an impressive and expansive database up-to-date with all the essential details and information once you submit them. The Goods and Services Tax has proven to eradicate tax evasion.

  • GST is a single tax system that subsumes a buffet of taxes, including the Utility Tax, Central Excise, Income Tax, Separate Extra Customs Duty, and Luxury Tax. It prohibits the imposition of different tax strata on goods and services that are taxable.

  • VAT and a variety of other indirect taxes are challenging to calculate and manage, especially since these taxes are different in different states. However, the Goods and Services Tax system does have a consolidated GST network with easy data access to its credit. The government has a much easier time handling tax payments and various other tax-related aspects.

What should you know about a GST Number?

A Goods and Services Tax Identification Number (GSTIN), also known as GST number, describes a 15-digit unique identification number exclusive to you once you are done with your GST online registration. There are many reasons why you should get a GST number for your business.

  • Primarily, you have to be on good terms with the government and the market and make sure you come across as a legitimate supplier of goods and services. A GST number can make this happen for you.

  • Secondly, you need a GSTIN or GST number for GST filing and the prevention of tax evasions.

  • Finally, it makes sure your tax payments and transactions are safe and secure and keeps you at bay from fraudulent companies.

How to Register for a GST Number?

This is how you go about the GST registration process:

  • Open the GST portal online and use your account details to sign in.

  • After this, click on services and find the new registration tab. Enter and submit your essential details, like your email ID, phone number, and Personal Account Number (PAN) head to the next step of the process.

  • Enter the OTP you receive at this point and get your Temporary Reference Number (TRN).

  • Make sure you go back to the services tab, select registration, and click on new registration. Enter the TRN you get and the displayed captcha code.

  • Now you will get one more OTP, after which you can expect to get redirected to the saved applications page.

  • Be sure to provide all the necessary business-related details such as your business location, bank account details, and many more. You also need to provide the required documents along with the specifics.

Verify your application using E-signature, Digital Signature Certificate, or Electronic Verification Code (EVC) and receive your Application Reference Number (ARN). You may use your ARN to track your GST registration status.

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