Structure Of GST

STRUCTURE OF GST

1. GST is levied on supply of goods and services across India (including Jammu and Kashmir). It is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Under GST credit of taxes paid at previous stages is available as set-off from the output tax.

2. GST is destination based consumption tax. Benefit of tax (STCG/ UTGST)  will accrue to the consuming state.

3. Centre and states will impose tax on goods and services simultaneously. Centre now can impose tax on sale of goods within State and States can impose tax on services.

(1) Intra-State supply  of goods and services-

§ CGST- Payable to Central Government

§ SGST/ UTGST- Payable to State Government/ Union Territory (as applicable) where they are consumed

(2) Inter-States Supply of goods and services

§ IGST - Payable to Central Government

4. Centre will levy and administer CGST and IGST while respective States/ UTs will levy and administer SGST/UTGST.

5. Import will be treated as inter-States supply and IGST will be chargeable along with basic Customs duty.

6. However, in GST Export will be treated as Zero rated supplies and no IGST is payable.

7. The rates of GST are 0.5%, 3%, 5%, 12%, 18% and 28%. In addition , compensation cess will be payable on pan masala, coal, aerated water and motor cars (Sin cess). There is no Education cess or Swach Bharat cess or Krishi Kalyan Cess on GST.

8. GST will be calculated on value of supply of goods and services, which is transaction value. (subject to some exceptions)

9. Under GST, every suppliers who have made taxable supply shall required to get himself registered under GST Law.

10. A registered person is entitled to take credit (deduction) of input tax paid from the output tax (if any) subject to following restriction:

(a) Utilisation of IGST : first utilised for the payment of IGST then the balance may be utilize towards payment of CGST and SGST/UTGST

(b) Utilisation of CGST: first utilised for the payment of CGST then the balance may be utilize towards payment of IGST.

(c) Utilisation of SGST/UTGST: first utilised for the payment of SGST/UTGST then the balance may be utilize towards payment of IGST.

11. Under GST regime there is a seamless (without any obstruction) credit flow in case of inter-state supplies, which is not possible in pre GST period. No credit is available for CST paid by the buyer. Under GST regime the seamless credit will flow as follows:

(a) The inter-state supplier in exporting state is allowed to set off the available credit in IGST, CGST and SGST/UTGST against the IGST payable. on inter-state supply made by him.

(b) The buyer of importing state in inter-state supply can avail the credit of IGST paid on purchase, from the output tax payable. so ne break of taking seamless credit.

(c) The exporting state transfers to the centre the credit of SGST/ UTGST utilised for the payment of IGST.

(d) The Centre transfers to the importing state the credit of IGST used in payment of SGST/UTGST.

12. A common portal or platform is needed which could act as a clearing house and verify the claims and inform the respective government to transfer the funds. This is possible with the help of a strong IT infrastructure. Accordingly Government has established common GST Electronic Portal (www.gst.gov.in), a website managed by Goods and Services Network (GSTN) for the tax payer and common IT infrastructure for Central and States. Primarily, GSTN provides three services to taxpayers.

(a) Facilitating of Registration.

(b) Forwarding the returns to Central and states authorities

(c) Computation and settlement of IGST

(d) Matching of tax payment details with banking network

(e) Providing analysis of taxpayers’ profile.