Everything You Need to Know About GST

Last Updated at: Jan 13, 2021
Interest Relief and Late fee waiver for taxpayers with an aggregate turnover of up to Rs 5 crore. Tax payments for Feb, Mar and Apr 2020: Interest will apply at a reduced rate of 9% p.a. instead of 18% p.a. if the return is filed after 6th July 2020 but before 30th September 2020. Tax payments for May, June, and July 2020: Late fee and interest charge will be waived off if filed by the staggered dates of September 2020 (due dates yet to be announced).


GST: The government notifies changes to rules on the input tax credit. The Centre has notified changes to the goods and services tax (GST) rules, lowering the input tax credit to 10% from 20% of eligible credit, if invoices or debit notes are not reflected in filings.


Launched on April 1, 2017, the Goods & Services Tax (GST) applies to all Indian service providers (including freelancers), traders and manufacturers. The GST is an all-in-one tax that subsumes a variety of state (VAT, Entertainment Tax, Luxury Tax, Octroi) and central taxes (CST, Service Tax, Excise Duty). GST is to be charged at every step of the supply chain, with full set-off benefits available. The procedure for Goods & Services Tax is entirely online and requires no manual intervention. Get all you need to know about GST in this blog.

GST is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.

Every product goes through multiple stages along the supply chain, which includes the purchasing of raw materials, manufacturing, sale to the wholesaler, selling to the retailer and then the final sale to the consumer. GST will be levied on each of these stages (including value addition) and at the point of consumption, rather the origin of the product. For example, if the product is produced in Tamil Nadu but consumed in Karnataka, then the entire tax revenue will go to Karnataka instead of Tamil Nadu.

Get Your Business GSTIN Number

Also, taxpayers with a turnover of less than Rs.1.5 crore can opt for composition scheme to get rid of tedious Goods & Services Tax formalities and pay GST at a fixed rate of turnover.

We provide the GST rate finder service. By using this service, you can find the HSN code list with GST rate. This finder service is also called the HSN code finder. The HSN code is used to find the GST rates of goods and services.

What are the components of GST?

Goods & Services Tax will have 3 tax components, which includes a central component (Central Goods and Services Tax or CGST) and a state component (State Goods and Services Tax or SGST)where centre and state will levy GST on all entities, i.e. when a transaction happens within a state. Inter-state transactions will attract the Integrated Goods and Services Tax (IGST), to be levied by the centre, i.e. when a transaction happens one state to another.

What is the input tax credit?

Input tax credit lets you reduce your tax you have already paid on inputs and pay the remaining amount at the time of paying tax.

You pay taxes on the purchase when a product is purchased from a registered seller, and when you sell the product, you too collect the tax. With input credit, you can adjust the taxes paid at the time of purchase with the amount of tax on sales(output tax) and pay the balance liability of tax, i.e. tax on sale minus tax on the purchase.

Who needs a GST Registration?

Every business or corporation that are involved in the buying and selling and good of services have to register for GST. It is mandatory for companies whose turnover is more than Rs.20 lakhs yearly to register for a Goods & Services Tax.

All businesses making interstate outward supplies of goods have to register for a GST too. The same applies to businesses making taxable supplies on behalf of other taxable persons, example Agents and Brokers.

Also, as per the recent notification, e-commerce sellers/aggregators need not register if total sales are less than Rs.20 lakhs.

What are the GST tax rates?

  • Items that are considered basic necessities come under exempt list i.e. they are not taxed.
  • Household necessities and life-saving drugs etc. are taxed at 5%.
  • Products like computers and processed food are taxed at 12%.
  • Hair oil, toothpaste and soaps, capital goods and industrial intermediaries are taxed at 18%.
  • Luxury items are taxed at 28%.

You can see the tax rates for all the products here: https://cbec-gst.gov.in/gst-goods-services-rates.html

What is a GST Return?

A GST Return is a document containing details of income that is required to be filed as per the law with the tax authorities. Under the Goods & Services Tax law, a taxpayer has to submit three returns on a monthly basis and one such return annually. All returns have to be filed online. Please note that there is no provision for revising the returns. All invoices for the previous tax period that went unreported must be included in the current month.

Under Goods & Services Tax, a registered dealer has to file GST returns that include: Purchases, Sales, Output, GST (On sales) and Input tax credit (GST paid on purchases).

What is GSTIN?

GSTIN is a unique identification number given to each GST taxpayer. However, to verify a GSTIN number a person who has a Goods & Services Tax number can log onto the GST portal.

What is the GSTN (Goods and Service Tax Network)?

The Goods and Service Tax Network (or GSTN) is section 8 (non-profit), non-government, private limited company. Indeed, GSTN is a one-stop solution for all your indirect tax requirements. GSTN is responsible for maintaining an Indirect Taxation platform for GST to help you prepare, file, rectify returns and make payments of your indirect tax liabilities.

How can Vakilsearch help you with your GST registration?

  1. We address all your queries in regards to Goods & Services Tax registration.
  2. Vakilsearch will help you get the entire process done in 7-10 days. (after submission of the documents)
  3. We will help you with the post-registration formalities and compliances.