Are You GST-savvy?

Overview of Goods and Services Tax (GST) in India

• GST is a digitalized form of VAT used in India on the supply of goods and services, with the same taxation slabs as VAT.

• It is a comprehensive, multistage, destination-based tax that subsumed almost all indirect taxes except a few state taxes.

• Goods and services are divided into five different tax slabs for collection of tax: 0%, 5%, 12%, 18%, and 28%, with a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold.

• The GST Council, consisting of finance ministers of the central government and all states, governs the tax rates, rules, and regulations.

• The GST replaced multiple taxes levied by the central and state governments and reshaped India's $2.4 trillion economy.

• The GST implementation received criticism, but it resulted in the disbanding of interstate check posts, reducing travel time in interstate movement by 20%.

• The reform of India's indirect tax regime started in 1986 and was proposed as a single common "Goods and Services Tax (GST)" in 1999.

• The GST Bill was introduced in the Lok Sabha in 2014 and was passed by the Rajya Sabha in August 2016.

• India adopted a dual GST model, with Central GST (CGST) and State GST (SGST) for transactions made within a single state and an Integrated GST (IGST) for inter-state transactions and imported goods or services.

• HSN codes, a global commodity classification system, are used to classify commodities for GST, and their use is based on a company's turnover.

• GST rates vary for different items, with some industries and products exempted from GST, such as dairy products, fresh vegetables and fruits, meat products, and other groceries and necessities.

• An e-Way Bill is an electronic permit for shipping goods that is compulsory for inter-state transport of goods beyond 10 kilometers and the threshold limit of INR 50,000.

• Reverse Charge Mechanism (RCM) is a system in GST where the receiver pays the tax on behalf of unregistered, smaller material and service suppliers.Overview of Goods and Services Tax (GST) in India

• GST is a value-added tax levied on the supply of goods and services in India, replacing various indirect taxes levied by the central and state governments.

• The tax is collected by both the central and state governments, with the central government collecting the Integrated GST (IGST) for inter-state transactions.

• The GST Council is the governing body of GST and is responsible for modifying, reconciling, or enacting any laws or regulations related to GST in India.

• The council is headed by the Union Finance Minister Nirmala Sitharaman and consists of 33 members, including 2 members from the central government and 31 members from 28 states and 3 Union territories with Legislature.

• The GSTN is a non-profit organization responsible for creating a network accessible to stakeholders, government, and taxpayers to access information from a single source.

• The GSTN's authorized capital was initially held by the Central Government (24.5%), state government (24.5%), and non-government financial institutions (51%), but later became a wholly owned government company with equal shares of state and central government.

• As of October 2018, over 1 crore taxpayers have registered under GST, with 38 lakh new taxpayers registering under the regime.

• Technicalities of GST implementation in India have been criticized by global financial institutions, Indian media, and opposition political parties for being too complex and having flaws compared to GST systems in other countries, including the second-highest tax rate among a sample of 115 countries at 28%.

• Indian businessmen have also criticized GST for problems such as tax refund delays and excessive documentation and administrative effort.

• The Indian National Congress has been a vocal opponent of GST implementation in India, with party President Rahul Gandhi dubbing it the "Gabbar Singh Tax" and claiming it is a way of removing money from the pockets of the poor.

• An estimate suggests that 230,000 small businesses shut down due to complications with GST compliance.

• The GST revenue statistics and returns filed are publicly available on the GSTN portal.