Indian Tax Structure

Tax: -  Tax is a fee charged by the Govt. on services and production of products.  

Indirect tax: - it is a tax charged on services and production. Total tax finally transferred to the consumer so the liable person is consumer but the consumer paid that tax to the seller and the seller pay that tax to the Govt. that’s why it is called indirect tax. Like: - vat, sale tax, excise etc.

Direct Tax: - Direct tax means the tax which is directly paid to the govt. by the accesses person. Like: -income tax, house tax etc.

Goods  And Services Tax

What is GST in India?

GST (goods and services tax) is an Indirect Tax which replaced many Indirect Taxes in India. The good and services tax act was passed in 1^st July 2017 and has been implemented since then. GST is an indirect tax for the whole nation, which makes India one unified common market. It is a single tax on the supply of goods and services.

Before GST, taxes such as service taxes, state vats, entry taxes, luxury taxes were applied on goods. These taxes have been absorbed under GST. Similarly, Service tax, entertainment tax was levied on services. Now there is only a single tax, that is, GST.  Under GST, tax is levied directly at every point of sale.

After implemented GST 3 kinds of GST applicable: -

1.       CGST       : - Revenue of tax will collected by the central govt.

2.     SGST       : - Revenue of tax will collected by the state govt. for intra State sale.

3.       IGST        : - Revenue of tax will collected by the central govt. for inter  State sales

 

Transaction	Old tax system	New tax system	remark
INTRA-STATE SALES	VAT/Central excise/ST.	CGST + SGST	Amount shared between state and central govt.
INTER-STATE SALES	CST + Excise/ST.	IGST	Full amount collected by central govt.

 

What is GST Registration

In the GST businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.

Types of GST Registration

1. Normal Taxpayer: - This category of GST registration applies to taxpayers operating a business in India. Taxpayers registering for normal taxpayer does not require a deposit and also provided with unlimited validity date.
2. Composition Taxpayer: - Businesses with annual turnover up to Rs 1.5 crore can opt for composition scheme , the individual should enroll under GST Composition Scheme. Taxpayers enrolled under the Composition Scheme can pay a flat GST rate. However, the taxpayer would not be allowed to claim the input tax credit.
3. Casual Taxable Person: - Any taxpayer establishing a stall or seasonal shop shall register under Casual Taxable Person. To register as a casual taxable person, the taxpayer shall pay a deposit equal to the amount of GST liability. The liability should match the active registration periods. The registration remains active for a period of 3 months.
4. Non-Resident Taxable Person: -The category non-resident taxable person applies to individuals located outside of India. The taxpayers should and supplying goods or services to residents in India. To register as a casual taxable person, the taxpayer shall pay a deposit equal to the amount of GST liability. The liability should match the active registration periods. The registration remains active for a period of 3 months.

Documents Required for GST Registration

1.       PAN of the Applicant

2.       Aadhaar card

3.       Proof of business registration or Incorporation certificate

4.       Identity and Address proof of Promoters/Director with Photographs

5.       Address proof of the place of business

6.       Bank Account statement/Cancelled cheque

7.       Digital Signature

8.       Letter of Authorization/Board Resolution for Authorized Signatory

 Types of GST Returns and Due dates

 

In GSTR-1, only sales and sales return details are to be filed. It includes all types of sales and sales return like B2B, B2C, export sales, exempted sales and also amendment in invoices previously uploaded.

Due date for filing GSTR-1 for monthly filers is 11th of the next month and for quarterly filers is 13th of next month of quarter. 

GSTR-2A: - is a view-only GST return. It contains the details of all inward supplies of goods and services i.e., purchases made from GST registered suppliers during a tax period.

The data is auto-populated based on data filed by the corresponding suppliers in their GSTR-1 returns.

Since GSTR-2A is a read-only return, no action can be taken in it. However, it is referred by the buyers to claim an accurate Input Tax Credit (ITC) for every financial year, across multiple tax periods. In case any invoice is missing, the buyer can communicate with the seller to upload it in their GSTR-1 on a timely basis.

GSTR-2B is again a view-only static GST return important for the recipient or buyer of goods and services. It is available every month, and contains constant ITC data for a period whenever checked back.

ITC details will be covered from the date of filing GSTR-1 for the preceding month (M-1) up to the date of filing GSTR-1 for the current month (M). The return is made available on the 12th of every month, giving sufficient time before filing GSTR-3B, where the ITC is declared.

GSTR-3B :- In GSTR-3B, summary of all transactions is to be entered. Details of each invoice is not entered in GSTR-3B.

Before final submission of GSTR-3B, it is required to pay the tax and late fees due. Otherwise, you cannot file the return.

Note – Late fees for a month/quarter is payable in next month/quarter.

Due date to file GSTR-3B is 20th of next month for monthly filers and 22nd or 24th (state-wise) of next month for quarterly filers as under

GSTR-4 is the annual return that was to be filed by the composition taxable persons under GST, by 30th April of the year following the relevant financial year. It has replaced the erstwhile GSTR-9A (annual return) from FY 2019-20 onwards.

Prior to FY 2019-20, this return had to be filed on a quarterly basis. Thereafter, a simple challan in form COM-08 filed by 18th of the month succeeding every quarter replaced it.

The composition scheme is a system in which taxpayers dealing with goods and having a turnover up to Rs.1.5 crores can opt into and pay taxes at a fixed rate on the turnover declared. Further, the service providers can avail a similar scheme CGST (Rate) Notification 2/2019 dated 7th March 2019 if turnover is up to Rs.50 lakh.

 

GSTR-5 is the return to be filed by non-resident foreign taxpayers, who are registered under GST and carry out business transactions in India.

The return contains details of all outward supplies made, inward supplies received, credit/debit notes, tax liability and taxes paid. 

The GSTR-5 return is to be filed monthly by the 20th of each month under GSTIN that the taxpayer is registered in India.

GSTR-5A: -refers to a summary return for reporting the outward taxable supplies and tax payable by Online Information and Database Access or Retrieval Services (OIDAR) provider under GST.

The due date to file GSTR-5A is the 20th of every month.

GSTR-6  is a monthly return to be filed by an Input Service Distributor (ISD).

It will contain details of input tax credit received and distributed by the ISD. It will further contain details of all documents issued for the distribution of input credit and the manner of distribution.

The due date to file GSTR-6 is the 13th of every month.

GSTR-7 is a monthly return to be filed by persons required to deduct TDS (Tax deducted at source) under GST.

This return will contain details of TDS deducted, the TDS liability payable and paid and TDS refund claimed if any.

The due date to file GSTR-7 is the 10th of every month.

GSTR-8 is a monthly return to be filed by e-commerce operators registered under the GST who are required to collect tax at source (TCS).

It contains details of all supplies made through the e-commerce platform, and the TCS collected on the same.

The GSTR-8 return is to be filed on a monthly basis by the 10th of every month.

GSTR-9 is the annual return to be filed by taxpayers registered under GST. It is due by 31st December of the year following the relevant financial year, as per the GST law.

It contains the details of all outward supplies made, inward supplies received during the relevant financial year under different tax heads i.e. CGST, SGST & IGST and a summary value of supplies reported under every HSN code, along with details of taxes payable and paid.

It is a consolidation of all the monthly or quarterly returns (GSTR-1, GSTR-2A, GSTR-3B) filed during that financial year. GSTR-9 is required to be filed by all taxpayers registered under GST.

However, there are few exceptions such as taxpayers who have opted for the composition scheme, casual taxable persons, input service distributors, non-resident taxable persons and persons paying TDS under section 51 of the CGST Act.

Note: As per the CGST notification no. 47/2019, later amended, the annual return under GST for taxpayers having an aggregate turnover that does not exceed Rs.2 crore has been made optional for FY 2017-18, FY 2018-19 and FY 2019-20.

GSTR-9A:-is currently a suspended annual return earlier required to be filed by composition taxpayers. It had a consolidation of all the quarterly returns filed during that financial year.

Ever since GSTR-4 (annual return) was introduced from FY 2019-20, this return stands scrapped. Prior to that, GSTR-9A filing for composition taxpayers had been waived off for FY 2017-18 and FY 2018-19.

GSTR-9C is the reconciliation statement to be filed by all taxpayers registered under GST whose turnover exceeds Rs.2 crore in a financial year, as per the GST law.