The Goods and Services Tax (GST) is an indirect tax that was implemented in place of the array of taxes like Value Added Tax (VAT), excise duty, sales tax, and so on. It is a unified tax levied on all providers of goods and services in India. GST in India has managed to simplify tax calculations and eradicate the cascading effect of the taxes mentioned earlier.
What should you know about the Goods And Services Tax?
GST is slotted into several GST slabs. The GST slab rates are 5%, 12%, 18%, and 28%. The GST council administers GST and is regulated by the GST Act introduced in 2017. The Goods and Services Tax is levied on almost all types of products and services you can think of. However, there are a few exceptions like electricity, petroleum, and so forth.
The two types of GST that are generally imposed on goods and services are the Central Goods and Service Tax (CGST) and the State Goods and Service Tax (SGST). CGST is levied by the central government on transactions that happen within the same state, and SGST is levied by the state government on transactions within the same state.
Both the central and state governments collect the same tax percentage on the transaction. The Integrated Goods and Services Tax (IGST) is levied by the central government when there is an inter-state supply of goods and services. As mentioned earlier, the intention of GST’s implementation was the removal of double taxes that would occur before and after the production of goods and services.
Advantages and Disadvantages of the Goods and Services Tax
The Goods and Services Tax has its share of advantages and disadvantages. Here are some advantages of GST:
- Its primary advantage is the elimination of the cascading effect of taxes or double taxation that was rampant under the previous tax structure. Before GST came into play, taxes like VAT would be imposed, and the rates would vary with each state. As a result, the final prices of goods and services would become unreasonably high.
- Secondly, it helps simplify the calculation of taxes, which was not the case earlier. Tax calculations back then were much more tedious and confusing.
- Finally, GST allows you to claim Input Tax Credit (ITC) on your tax payments provided you pay taxes on time, and you’ve registered for a GSTIN.
Here are some disadvantages of GST:
- While the implementation of GST has resulted in some positive changes, businesses now have no choice but to spend significant amounts of time and money to make sure their operations are GST-compliant.
- They need to spend money on updating their software to suit the GST rules or get all new software for the same. They also need to hire tax professionals to help their employees get up to speed on how to operate under the GST regime.
Important GST News and Updates
If you are looking for the latest GST news, check this out:
May 6th, 2020
You may take your time to submit the GSTR-9 annual form and GSTR-9C form because the last date for this is September 30th, 2020. The E-Way bill issued on or before March 24th is valid until May 31st.
May 16th, 2020
As per the Central Board of Indirect Taxes and Customs (CBIC), they are committed to ensuring liquidity to those paying GST, particularly in the MSME sectors. Additionally, they have sanctioned GST refund claims that amount to a total of 11,052 CR.
May 26th, 2020
As per the CBIC, there is a Special Refund and Drawback Disposal Drive meant to help MSMEs or Exporters during this lockdown. They also announced that 6.76 Lakh claims of IGST, Drawback, or refund that amount to Rs. 8656 CR have been disposed of.
This should keep you up to date with whatever is happening in the GST realm. If you feel the need to catch up on the latest GST news and updates, be sure to check the official GST website or the CBIC website regularly.