GST Rules and Regulations: The Components of Utmost Importance

0
350
gst tax rules

With an objective to streamline all the taxes in mind, the government rolled-out the Goods and Services Tax Act on July 1st, 2017. Although GST subsumed all the earlier taxes under one umbrella, the compliance issues are still increasing. Since the regime is completely digital in nature, the technology plays an important role in making the regime simpler for the taxpayers of the nation.But sometimes the workload such that you couldn’t spare time for the activities related to the indirect taxation regime. The best solution to this problem is the immediate awareness and guidance related to GST. Let’s start with the GST components that, if overlooked, could invalidate the entire taxation:

  1. GST registration– This is the first step for a business to start complying with the Goods and Services Tax Act. However, the government has tried to keep the process of registration hassle-free. To register your business under GST, you’d require few mandatory documents along with the passport-size photographs. Here is a list of documents required for the registration:
  • PAN of the business and applicant.
  • A valid mobile number and email address.
  • The proof of business place (rent/lease agreement etc.).
  • A valid Indian bank account number.
  • A list of the goods and services that are a part of the business.
  • The Letter of Authorization with authorized signatory’s photograph.
  • The certificate of incorporation.

Following the submission of these documents, the assigned authority would cross-check all the details provided by the applicant. Once the application is approved, the applicant would be provided with a GSTIN (Goods and Services Tax Identification Number). As per the GST rules and regulations, you’d be required to put the GSTIN in a place (the front of the office recommended) so that it is visible to all. And that’s how the GST registration process gets completed. Easy, isn’t it?

  1. The tax calculation– Without the right calculations neither you would be able to fathom the payable tax nor you would be able to file the returns. Since the taxation regime is destination-based, the process to calculate tax becomes a little bit tricky. The tax is divided into three categories and has five slabs:
  • CGST- Central Goods and Services Tax.
  • SGST- State Goods and Services Tax.
  • IGST- Integrated Goods and Services Tax.
  • 0% or nil, 5%, 12%, 18%, and 28% respectively.

And here’s how it works. The introduction of GST in India made the tax calculation transparent. Ifa transaction of INR 1000 falls under 12% tax category, then both the center and state government would receive 6% tax amount each. While calculating the applicable tax, keep three things in the mind. Firstly, determine the tax percentage under which the transaction falls. Secondly, do not miss out on any of the HSN/SAC codes used for the identification of the goods and services. Thirdly, do not forget to subtract the tax amount paid on the inputs.However, the government has recently brought into everyone’s notice that most of the taxpayers have paid tax amount exceeding the payable tax. So better not to be confused about the tax calculation.