When was GST first introduced in India?
In 2000, the then Prime Minister considered the idea of GST and set up a committee to design the GST service model for the country. The government formed a task force in 2003 which in 2004 strongly recommended to implementation of a fully integrated ‘GST’ on a national basis.
Finance Minister in the 2006-2007 budget announced that the GST would be implemented from April 1 2010. Since then, GST has missed several deadlines. In 2014 when NDA government came to power GST gained momentum. The bill was passed in the Lok Sabha on the 6th May 2015 and in the Rajya Sabha on 3rd August 2016.
On 8th September 2016 GST received the President’s assent and this become Constitution Amendment Act, 2016 (101st Amendment). On 27th March 2017 the Central GST legislation introduced the CGST bill 2017, IGST bill 2017, UTGST bill 2017 and SGST bill 2017 the the Lok Sabha which was passed on 29th March 2017.
States like Telangana, Rajasthan, Chhattisgarh, Punjab, Goa and Bihar were the first to implement GST. By 30th June 2017, all states and UT’s had introduced their respective SGST and UTGST Acts, making GST effective from 1 July 2017, except Jammu and Kashmir.
Meaning of GST (Goods and services tax)
The Goods and services tax (GST) is a value added tax which means the tax will be charged on the value added to a product or service at each stage of its production and distribution. It is levied on manufacture or supply of goods or services. The supplier qualifies to avail credit of GST paid on purchase of goods or services. Ultimate burden of GST shifted to final consumer. GST is charged on value addition to the product or services only so there is no cascading of taxes under GST system.
GST is a single, unified tax system. It has subsumed multiple indirect taxes like excise duty, service tax, value added tax (VAT), central sales tax (CST), luxury tax, entertainment tax, entry tax etc. Many countries follow unified GST i.e, a single tax applicable throughout the country. India has adopted dual GST model in which GST is levied by both central and state government. GST is applicable on entire country including Jammu and Kashmir.
GST is a destination based tax, means where goods and services are consumed. Here are taxes included under GST in India:
- Central Goods and services tax (CGST) is levied and collected by central government.
- State Goods and services tax (SGST) is levied and collected by states/Union Territory with Legislatures.
- Union Territory Goods and services tax (UTGST) is levied and collected by Union Territory without Legislature on intra-state supplies of taxable goods and/or services. Intra-state supply means location of supply and place of supplier are in the same State/Union territory.
- Interstate Goods and services tax (IGST) is levied by the center on all inter-state supplies. Inter-state supply means location of supplier and place of supply in two different State/Union territory.
GST Registration
Registration is the basic requirement for person who is liable to pay tax. In indirect tax (GST) without registration a person cannot collect tax and cannot claim any credit on the tax paid by him. Once the supplier’s aggregate turnover exceeds the threshold limit during a F.Y, every person who is supplier of goods and/or services is required to obtain registration under GST law in the State/UT from where he makes the taxable supply [Section 2(108)]. Under GST supplier is required to obtain state-wise registration, there is no concept of a centralize registration. Section 22 to 30 along with Rule 8 to 26 of the CGST Act, 2017 contains the provision of registration.
The threshold limit of GST registration varies from state to state. The threshold limit of aggregate turnover prescribed for various States/UTs are as follows:
| State with threshold limit of Rs.10 lakh for supplier of goods and/or services. | State with threshold limit of Rs.20 lakh for supplier of goods and/or services. | State with threshold limit of Rs.20 lakh for exclusive supplier of services or supplying both goods and services and threshold limit of Rs.40 lakh for exclusive supplier of goods making intra-state supply. |
| · Manipur
· Mizoram · Nagaland · Tripura |
· Arunachal Pradesh
· Meghalaya · Sikkim · Uttarakhand · Puducherry · Telangana |
· Jammu and Kashmir
· Assam · Himachal Pradesh · All other states |
Types of GST registration
Under chapter VI- Registration of the CGST Act contains the registration provisions. There are various types of registration – section 22 – Person liable for registration, under section – 24 compulsory registration in certain cases and section 26 – Deemed registration. The person who is required to obtain compulsory registration is listed below:
- Person making inter-state taxable supply
- Casual taxable persons (CTP) making taxable supply.
- Persons who are required to pay tax under reverse charge on inward supplies received.
- Non-resident taxable persons (NRTP) making taxable supply.
- E-commerce operator.
- Person who make taxable supply of goods or services or both on behalf of other taxable person.
- Every person supplying OIDAR services from outside India to a non-registered person in India.
- An Input service distributor (An office of the supplier of goods and/or services).
- Every person supplying online money gaming from a place outside India to a person in India.
- Person who is required to deduct tax under section 51 (If the total value of supply of taxable goods or services or both exceeds Rs.2,50,000 then tax shall be deducted at prescribed rate).
- Such other person or class of person as may be notified by the Government on the recommendations of the Council.
GST Returns and Compliance
Returns are the statement furnished by the taxpayer to the government at regular intervals. GST returns are the details of business operation such as sale price, sales turnover, or value, deductions and exemptions and determination and discharge of tax liability for a given period. Since, GST returns filing helps in determination of tax liability of return filler and additionally, it also helps in determining the tax liability of other party involved in taxable transactions with them, hence, it is most important to file correct and timely GST returns.
There are multiple sections which prescribe the provisions relating to filing of returns. Every registered person is required to furnish details of outward supplies, inward supplies etc.
Types of returns
GSTR-1: All registered person including casual registered person are required to file details of outward supplies electronically in Form GSTR-1 for the month and quarter. The due date of submission of GSTR-1 for registered persons opting for QRMP scheme is on 13th day of month succeeding such quarter for example, for quarter Oct-Dec 2024, the due date is 13th January 2025. For others 11th day of the month succeeding such month. For example, for December 2024, the due date is 11th January 2025.
HSN in GSTR-1
Tax payer having aggregate annual turnover in the preceding financial year upto ₹5 crore, number of digits of HSN Code for B2B supplier is 4 digits and for B2C is 4 digits (optional) and if aggregate annual turnover in preceding financial year exceeds ₹5 crores, 6 digits of HSN Code is required to report in GSTR-1.
GSTR-3B: GSTR-3B contains summary of outward supplies, inward supplies liable to reverse charge, eligible ITC, payment of tax etc. It can be submitted electronically through the common portal. Due date for filing of monthly GSTR-3B on or before 20th of the month succeeding the month in which return is furnished and due date for quarterly GSTR-3B on or before 22nd or 24th of the month succeeding the quarter for which return is furnished in case of a taxpayer opting for QRMP scheme.
GSTR-4: Registered person opting for composition levy shall furnish return electronically in Form GSTR-4 on yearly basis. Composition supplier are required to furnish a quarterly in Form GST CMP-08 statement containing details of payment of self-assessed tax by 18th day of the month succeeding such quarter. Due date for furnishing GSTR-4 is by 30th June following the end of such financial year.
Nil GSTR-1, GSTR-3B and GST CMP-08 can be filed through SMS using the registered mobile number of the taxpayer.
GSTR-9: This is an annual return which is required to be furnished by all registered person. However, following persons are not required to file annual return:
- A casual taxable person
- Non-resident taxable person
- Input service distributors
- Persons authorized to deduct/collect tax at source under section 51/52.
Due date to file annual return is by 31st December of the next financial year.
GSTR-10: Registered person whose registration has been cancelled is required to file final return electronically in Form GSTR-10. Time limit to file final return is within 3 months of (i) the date of cancellation or (ii) date of order of cancellation whichever is later.
GST return can be filed by logging into the GST portal which can be assessed by given link https://services.gst.gov.in/services/login .
For GST login, the username, password and captcha code must be entered.