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Understanding GST

The document provides an overview of the Goods and Services Tax (GST) system implemented in India including its history, structure, registration process, returns, compliance requirements, input tax credits, invoicing, audits, challenges and benefits.

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Shruti Sharma
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24 views

Understanding GST

The document provides an overview of the Goods and Services Tax (GST) system implemented in India including its history, structure, registration process, returns, compliance requirements, input tax credits, invoicing, audits, challenges and benefits.

Uploaded by

Shruti Sharma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Understanding GST

GST, or Goods and Services Tax, is a comprehensive consumption tax on


the supply of goods and services.

SA by Shruti Sharma
History of GST
1 1999 - Proposal
GST first proposed by the Atal Bihari Vajpayee government.

2 2006 - Roadmap
Discussed in the Empowered Committee of State Finance Ministers.

3 2016 - Launch
GST implemented in India on July 1, 2017, replacing multiple indirect
taxes.
GST Rates and Structure
Multiple Tax Rates: GST comprises a range of tax rates, including 5%, 12%, 18%, and 28%.

Goods Classification: Goods are categorized into different slabs based on their nature and usage.

Service Taxation: A unified 18% GST rate applies to most services, with some exceptions.

Compensation Cess: An additional cess is levied on certain luxury and demerit goods.

Dual GST Structure: GST is levied by both the central government (CGST) and state governments
(SGST).
GST Registration Process
Threshold Limits Registration Application
Determine if business meets GST Apply online through GST portal with
registration threshold required documents

Provisional Registration Final Registration


Obtain temporary GSTIN and start invoicing Submit KYC docs, verify details, and
under GST complete registration
GST Returns and Compliance
Regular filing of GST returns: GSTR-1, GSTR-3B, and others. Timely compliance to avoid penalties.

Maintaining detailed records of all business transactions under GST.

Reconciling GSTR-2A with purchases and claiming eligible input tax credits.

Adhering to GST invoicing rules and e-way bill regulations for goods transportation.
Input Tax Credit (ITC) under
GST
ITC allows businesses to offset the GST paid on purchases against the
GST charged on sales.

Businesses can claim ITC for goods and services used in the course of
their operations.

ITC eligibility depends on the nature of purchases and compliance with


invoicing rules.

Proper documentation and timely reconciliation are crucial to


maximize ITC claims.
GST Invoicing and Reporting
Invoicing Monthly GST ITC Compliance Audit and
Requirements Returns Reporting
Claim eligible input
Detailed tax invoice File GSTR-1 and tax credits Regular GST audits
with mandated fields GSTR-3B on time by tax authorities
Maintain detailed
E-way bill for goods Reconcile purchases purchase records Complete books and
transport with GSTR-2A records for
compliance
GST Audit and Assessments
$4.50

$3.00

$1.50

$0.00
Routine Audit Detailed Audit Special Audit Assessment

The GST audit and assessment process involves regular monitoring and verification of a business's GST
compliance.
Challenges and Issues in GST
Implementation
Complex Compliance Technological Challenges
Multiple returns, invoicing rules, and Technical glitches in GST portal and e-way
documentation requirements create bill system disrupt operations.
administrative burden.

Interpretational Ambiguities Revenue Leakages


Frequent changes in GST laws and lack of Evasion and fraudulent practices undermine
clarity lead to confusion. the intended GST framework.
Benefits of GST for Businesses and
Consumers

Reduced Improved Supply Increased Input Lower Prices for


Compliance Costs Chain Efficiency Tax Credits Consumers
Simplified tax Elimination of Businesses can claim Reduced tax burden
structure lowers cascading taxes ITC on a wider range of leads to more
administrative burden enables seamless purchases. affordable goods and
for businesses. movement of goods. services.

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