Overview

GST (Goods and Services Tax) is a comprehensive, multi-stage, destination-based tax levied on every value addition in India. It replaced various indirect taxes like VAT, service tax, excise duty, and others to create a single, unified tax system.

Key Features of GST:

1. Unified Tax Structure: GST subsumes all indirect taxes and brings uniformity across India.
2. Multi-Stage Tax: GST is applied at every stage of the supply chain, from production to sale, with credit for tax paid at earlier stages (input tax credit).
3. Destination-Based: The tax is collected at the point of consumption, not the point of origin.
4. Four Tax Slabs: GST has different rates—5%, 12%, 18%, and 28%, based on the type of goods and services.

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Requirement

• Annual Turnover Threshold: Businesses with an aggregate turnover exceeding ₹20 lakhs (₹10 lakhs for northeastern and special category states) in a financial year must register for GST.
• Inter-State Businesses: Any business involved in supplying goods or services across state borders, regardless of turnover, must register for GST.
• E-Commerce Operators: Platforms like Amazon or Flipkart and sellers using such platforms must register.
• Casual Taxable Persons: Individuals or businesses conducting occasional taxable transactions, like seasonal businesses, must also register.
• Service Providers: Service providers earning more than ₹20 lakhs per year are required to register for GST.
• Non-Resident Taxable Persons: Non-residents conducting taxable transactions in India must obtain GST registration.
• Compulsory Registration: Entities involved in reverse charge mechanism, input service distributors, and TDS deductors must also register.

Types

1. CGST (Central Goods and Services Tax)

• Collected by: Central Government.
• Applicable on: Intra-state supply of goods and services (transactions within the same state).
• Purpose: Revenue goes to the Central Government.
• Example: If a business in Delhi sells goods to a customer in Delhi, CGST will be charged along with SGST.

2. SGST (State Goods and Services Tax)

• Collected by: State Government.
• Applicable on: Intra-state supply of goods and services.
• Purpose: Revenue goes to the State Government.
• Example: In the same Delhi-to-Delhi sale, SGST will be applied along with CGST.

3. IGST (Integrated Goods and Services Tax)

• Collected by: Central Government.
• Applicable on: Inter-state supply of goods and services (transactions between two states or union territories) and imports/exports.
• Purpose: Revenue is shared between the Central and State Governments.
• Example: If a business in Maharashtra sells goods to a customer in Karnataka, IGST will be charged.

4. UTGST (Union Territory Goods and Services Tax)

• Collected by: Union Territory Administration.
• Applicable on: Supply of goods and services in Union Territories without a legislature (e.g., Andaman and Nicobar Islands, Lakshadweep).
• Purpose: Revenue goes to the Union Territory.
• Example: A sale occurring in Andaman will have UTGST and CGST applied.

Key Differences:

• CGST and SGST are applied for transactions within the same state.
• IGST is applied for transactions between two different states.
• UTGST is similar to SGST but applies to Union Territories.

Document

• PAN Card: Personal PAN for individuals, and entity’s PAN for businesses.
• Proof of Business Address: Rental agreement, utility bills, or property tax receipt.
• Bank Account Details: Cancelled cheque or bank statement.
• Identity Proof of Promoters/Partners: Aadhaar card, passport, or voter ID.
• Photograph: Passport-sized photo of the business owner or partners.
• Business Constitution Documents: Partnership deed, incorporation certificate, or registration proof of the business.