GST stands for goods and services tax. This is an indirect tax for consumption on consumers in India for goods and services. GST is applied at every step during the process of production and refunded to all the parties except the last one which is the main consumer. in this article, we will discuss How is GST Registration Beneficial to US?
The GST registration is divided into 5 different slabs of taxation:-
However, products containing alcohol and petroleum products, electricity and property selling and buying in real estate is taxed separately according to specifics in rules of each state the sale is conducted in. There is a special rate of taxation for the rough (raw) precious or semi-precious stones of 0.25%, and the rate of taxation of 3% over Gold. In addition with this, a cess of 22% and/ or another percentage of tax rates on top of 28% of GST is applied over the goods like carbonated or aerated drinks, on luxury items or the items that are listed under luxury items and tobacco.
Before GST had come into action, the statutory tax rate for most of the goods used to be about 26.5% but after application of GST now most of it all falls into the 18% tax slab/slot.
What Is GST law enforcement?
The GST tax of the goods and services tax had come into action from the date “1st July 2017”. The implementation came by through the 101st amendment of the Indian constitution. The implementation happened during the period of Narendra Modi’s government.
This GST tax has replaced all the pre-existing taxes levied by the central government and the state government. The rate of Tax of GST, its rules and regulations are governed by the council of GST which comprises of the ministers of finance of the central government and of all the states. The GST way of taxing has simplified the complicated indirect taxation and has unified it and goes in a sequenced organized way which in turn has dramatically reshaped the Indian economy which is of about 2.4 trillion dollars. The travel by truck time between the two states has dropped by 20% because there are no longer any check posts in between.
The types of GST Registration
- Central GST (CGST)
- State GST (SGST)
- Integrated GST (IGST)
All three applied differently and superimposed depending on the step of the process in production. GST Registration is always based on region and each state has its own regulations. Hence the production may be done somewhere but tax is applicable where the product is consumed. And the laws shall follow of the consumer region.
The harmonized system of Nomenclature in GST Registration
The harmonized system of nomenclature also for short goes as HSN code in GST registration. This is an eight digital numerical code used for identifying the estimate of applying GST on supposed products as per the CGST (central GST) rules. Now to this account, if some company has a turnover of Rs. 1.5 cr but then up to Rs 5 cr in a financial year then they wouldn’t need to mention the 2 digit HSN code during the supply of their goods or services in the invoices. However, if that turnover exceeds RS 5cr then they will have to mention 4 digit HSN code on their invoices.