GST Full Form
GST:- Good And Services Tax
GST full form " Good And Services Tax", and is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. Its main objective is to consolidate all indirect tax levies into a single tax, except custom (excluding SAD).
 |
| GST Full Form And Benefits GST long form |
One of the reasons to go the GST way is to facilitate seamless credit across the entries supply chain and across all states under a common tax base.
GST may be defined as a tax on good and services, which is leviable at each point of sale or provision of service, in which at the time of sale of goods or providing the services the seller or service provider may claim the input credit of tax which he has paid while purchasing the goods or procuring the service.
Illustration of GST [ All Paries are located in one state]Assumption:-
- Rate of Excise Duty- 12%
- VAT Rates-14.5 %
- Central GST Rates- 12%
- States GTS Rates- 12%
- Profit Margin- 10,000/5000/5000 (Before tax)
GST full form " Good And Services Tax"
Benefits Of GST:-
1. Abolition of multiple layers of item:-
Implementation of GST in India will integrate the existing line of taxes like Central Excise, Service Tax, Sales Tax, Value Added Tax, etc. into one tax i.e. GST. This will help avoiding multiple taxes currently being levied on products and services. For Example in the case of restaurant services we end up paying both services tax and VAT making taxable amount approximately 140% for the total amount (VAT on 100% value and services tax on abated 40% value).
2. Mitigation of Cascading Taxation:-
Under the GST regime, the final Tax would be paid by the consumer of the goods/ services but there would be an input tax credit system in place to ensure that there is no cascading of taxes. GST would be levied only on the value-added at every stage unlike the present scenario wherein tax is also required to be paid on tax in few cases i.e. VAT is payable on excise duty.
3. Development of common national market:-
GST would introduce a uniform taxation law across states and sectors in respect to indirect taxes which would make it easier to supply goods and services hassle-free across the country. This will help in removing economic distortions, promotes exports and bring about the development of a common national market. This will definitely give a boost to India's tax-to-gross domestic product ratio and thus help on promoting economic efficiency and sustainable long term economic growth.
4. Increase in voluntary compliance:-
Under the GST regime, the process will be simple and articulate with a lesser scope for errors. As all the information will flow through the common GST network it would make tax payment and compliances a regular norm with lesser scope for mistakes. It will only be upon the payment of tax, the consumer will get credit for the taxes they pay on inputs. This will generate an automatic audit trail of value addition and income across the production chain, creating a unified base of tax potential that can be tapped. Thus GST model will do away the need for the current patchwork of indirect taxes that are fractional.
5. Reduced Litigation:-
Taxation under GST would reduce litigation on account of clarity regarding the jurisdiction of taxation as against the present structure where there still exists an uncertainty regarding jurisdiction of taxation by center and state in few cases like in case of software, right to use of goods, etc. In GST Regime, with single tax law in place, there would be smooth assessments as compared to the present multiple assessments in different tad laws.
6. Efficient Administration by Government:-
Presently, on account of the multiplicity of taxes and their cascading effects, lack of integrated network, the administration of indirect taxes is a mammoth task for the government which also adds to the compliance and administration costs. Under the proposed GST regime, with unified tax rates, simple input tax credit mechanism, and integrated GST network, the information would be readily available and the administration of resources would be easy and efficient for the government. There would be a single tax, reduced error and litigations thus resulting in reduced administration costs too.
7. Will act as a tax booster for government:-
With a wider tax base, minimum floor rates, facility of seamless credit the goods and services tax would prove to be an efficient tax booster for the government. With the ease of compliance and integrated network data tax collection would be much easier for the government.
Entities involved in supplying goods or services with an annual aggregate turnover of more than Rs. 20 lakes in most states are required to register for GST mandatorily. In special category states, the aggregate turnover criteria has been reduced to Rs. 10 lakhs.
In addition to the turnover criteria, there are various other conditions that could mandate GST registration.
Inter-State Supply
Registration under GST is mandatory for entities undertaking the inter-state supply of goods and /or services, irrespective of aggregate annual turnover.
E-Commerce Sellers
Entities involved in the supply of goods or services through e-commerce platforms are mandatorily required to be registered under GST, irrespective of aggregate annual turnover. Hence, a seller on e-commerce platforms like Amazon, Flipkart and Snapdeal would have to register under GST mandatorily.
Existing taxpayers
All entities having service tax or VAT or central excise registration must be registered under GST mandatorily.
2. Mitigation of Cascading Taxation:-
Under the GST regime, the final Tax would be paid by the consumer of the goods/ services but there would be an input tax credit system in place to ensure that there is no cascading of taxes. GST would be levied only on the value-added at every stage unlike the present scenario wherein tax is also required to be paid on tax in few cases i.e. VAT is payable on excise duty.
3. Development of common national market:-
GST would introduce a uniform taxation law across states and sectors in respect to indirect taxes which would make it easier to supply goods and services hassle-free across the country. This will help in removing economic distortions, promotes exports and bring about the development of a common national market. This will definitely give a boost to India's tax-to-gross domestic product ratio and thus help on promoting economic efficiency and sustainable long term economic growth.
4. Increase in voluntary compliance:-
Under the GST regime, the process will be simple and articulate with a lesser scope for errors. As all the information will flow through the common GST network it would make tax payment and compliances a regular norm with lesser scope for mistakes. It will only be upon the payment of tax, the consumer will get credit for the taxes they pay on inputs. This will generate an automatic audit trail of value addition and income across the production chain, creating a unified base of tax potential that can be tapped. Thus GST model will do away the need for the current patchwork of indirect taxes that are fractional.
5. Reduced Litigation:-
Taxation under GST would reduce litigation on account of clarity regarding the jurisdiction of taxation as against the present structure where there still exists an uncertainty regarding jurisdiction of taxation by center and state in few cases like in case of software, right to use of goods, etc. In GST Regime, with single tax law in place, there would be smooth assessments as compared to the present multiple assessments in different tad laws.
6. Efficient Administration by Government:-
Presently, on account of the multiplicity of taxes and their cascading effects, lack of integrated network, the administration of indirect taxes is a mammoth task for the government which also adds to the compliance and administration costs. Under the proposed GST regime, with unified tax rates, simple input tax credit mechanism, and integrated GST network, the information would be readily available and the administration of resources would be easy and efficient for the government. There would be a single tax, reduced error and litigations thus resulting in reduced administration costs too.
7. Will act as a tax booster for government:-
With a wider tax base, minimum floor rates, facility of seamless credit the goods and services tax would prove to be an efficient tax booster for the government. With the ease of compliance and integrated network data tax collection would be much easier for the government.
 |
| GST Full Form And Benefits GST long form |
Registration of GST
GST full form:- " Good And Services Tax"Entities involved in supplying goods or services with an annual aggregate turnover of more than Rs. 20 lakes in most states are required to register for GST mandatorily. In special category states, the aggregate turnover criteria has been reduced to Rs. 10 lakhs.
In addition to the turnover criteria, there are various other conditions that could mandate GST registration.
Inter-State Supply
Registration under GST is mandatory for entities undertaking the inter-state supply of goods and /or services, irrespective of aggregate annual turnover.
E-Commerce Sellers
Entities involved in the supply of goods or services through e-commerce platforms are mandatorily required to be registered under GST, irrespective of aggregate annual turnover. Hence, a seller on e-commerce platforms like Amazon, Flipkart and Snapdeal would have to register under GST mandatorily.
Existing taxpayers
All entities having service tax or VAT or central excise registration must be registered under GST mandatorily.
Casual Taxable Persons
A casual taxable person is someone who occasionally undertakes a supply of goods or services having no fixed place of business. An example of a casual taxable person can be a fireworks shops setup during Diwali festival time, selling fireworks or a temporary food stall.
I hope I clearly described all your doubts if it is pls let me know in the comments.
0 Comments