When tax reform discusses goods and services, tax is the first that comes in one’s mind. 2017 will always be remarkable in the history of tax reform. Because in the same year, GST in India was introduced. Currently, it is applicable and accepted by almost 160 countries in the world, and now India is also included in the same. It is an indirect tax reform that completely changed the tax system of India. When GST in India was about to reach there was a lot of opposition it had faced. This is because of the lack of knowledge regarding the same. An individual who is in the business sector must have complete knowledge with respect to goods and services tax because it plays a really important role in the business world. For more knowledge about GST, continue reading this blog.
Journey of GST in India
GST is not an overnight change in India. It has been tried for many years to inculcate it in India. Given below is the journey of GST in India:
| Year | Development Towards GST |
| 2000 | This year, then Prime Minister Atal Bihari Vajpayee set up a committee to draft GST law with respect to India |
| 2004 | A task force came to the conclusion that GST should come in India so that the current tax structure of the country must be improved |
| 2006 | Then, the finance minister proposed that GST would be introduced on the 1st of April 2010 |
| 2007 | This year, GST was phased out, and rates were reduced from 45 to 3% |
| 2008 | The dual GST structure for India has been finalised, and it has been divided equally between the state and central |
| 2010 | Goods and Services Tax implementation was postponed |
| 2011 | An amendment to the introduced GST bill |
| 2012 | Discussion regarding the GST bill was started by the standing committee |
| 2013 | The standing committee submitted its report regarding the GST |
| 2014 | Now, after a long time, the GST bill was reintroduced in the parliament by the then-finance minister |
| 2015 | The bill of GST was passed in the Lok Sabha but failed to pass in the Rajya Sabha |
| 2016 | This year, they finally live, and it was passed in both houses and got the president’s assent |
| 2017 | Finally, with four supplementary laws, GST was introduced in India in 2017 |
Objective of Goods and Services Tax
Goods and Services Tax Act was introduced with various objectives, out of which are mentioned below:
- One nation, one tax ideology was tried to be achieved
- Compilation of majority of indirect taxes in India
- Make the tax system uniform in India
- Elimination of the cascading effect of taxes
- Secure the tax system from the evasion of taxes
- Increase the taxpayer base in India
- Promote digitalisation of the tax system
Tax Before GST in India
Before GST in India, there were various taxes that were applicable in India. GST in India came by replacing most of them. The list of those taxes is given below:
Central Taxes
- Central Exercise Duty
- Duties of exercise that were levied during the medical and toilet preparation
- Additional duties of exercise with respect to goods of special importance
- Additional duties of exercise with respect to textile and textile products
- Additional duties of customs, also known as CVD
- Special additional duty of customs, which is known as SAD
- Service Tax
- Cesses and surcharges, which are related to the supply of various goods as well as services
State Taxes
- State VAT as per the respective state
- Central Sales Tax
- Purchase Tax
- Luxury Tax
- Entry Tax
- Entertainment Tax
- Amusement Tax
- Taxes on Advertisement
- Taxes on lotteries, betting and gambling
- State cesses and surcharges, which are related to the supply of various goods as well as services
What are the Important Components of GST in India?
GST in India comprises SGST, UTGST, CGST, and IGST, with numerous advantages, including increased market reliability, enhanced trust among stakeholders, ease of fundraising, streamlined registration and compliance, and regulation of the unorganised sector. The four main components of GST in India are given below:
- State Goods and Services Tax, commonly known as SGST. This is applicable to businesses that are within a local limit and work in a particular state.
- Union Territory Goods and Services Tax, which is popular with UTGST. This is applicable to businesses that are within a local limit and work in a particular union territory.
- Central Goods and Services Tax CGST is applicable on the central level with the SGST and UTGST.
- Integrated Goods and Services are applicable to interstate transactions. In this component of GST, both state and central tax are involved in equal ratio
Advantages of GST
Some of the key advantages of GST in India include but are not limited to the following:
- Reliability has been increased in the market between the competitors
- Helps in building the trust of consumers as well as investors
- Easy and smooth fundraising
- Businesses can easily get investment
- Easy loan facility
- Offerers composition scheme for small businesses
- Simple GST Registration
- Easy and online GST compliance
- Increase the efficiency of a business
- Regulates the unorganised sector of businesses
Types of GST Return Filing
There are total return filing under the goods and services tax system. Below is the table that will introduce you to all of them:
| GST Return | Details |
| GSTR-1 | Return for Outward Supplies |
| GSTR-2 | Return for Inward Supplies |
| GSTR-2A | Read Only Document |
| GSTR-3B | Summary of Inward and Outward Supplies |
| GSTR-4 | Return For Composition Dealers |
| GSTR-5 | Return For Non-Resident Taxable Persons |
| GSTR-6 | Return For Input Service Distributors |
| GSTR-7 | Return For Taxpayers Deducting TDS |
| GSTR-8 | Return For E-Commerce Operators Collecting TCS |
| GSTR-9 | Annual Return For Normal Registered Taxpayer Under GST |
| GSTR-9A | Annual Return For Composition Dealers |
| GSTR-9B | Annual Return For E-Commerce Operators Collecting TCS |
| GSTR-9C | Return For Registered Persons Getting Accounts Audited From CA |
| GSTR-10 | Return For Registered Person Whose GST Registration Gets Cancelled |
| GSTR-11 | Return For UIN (Unique Identification Number) Holders |
Process of GST Registration in India
GST registration is an intrinsic part of the GST in India. To get the various advantages of GST, it is a must to register for GST. To start the registration process for Goods and Services Tax (GST), you should begin by visiting the official GST portal. Once there, look for the “Services” option and click on it. Then, select “Registration” and choose “New Registration.” This action will open a form that you need to complete and submit. After you’ve submitted the form, you will receive a unique TRN (Temporary Reference Number).
Using this TRN, you can log in to the portal. Once logged in, you’ll need to provide various details related to your business, including business information, promoter or partner details, authorised signatory information, representative details, principal place of business information, additional place of business details, and specifics about the goods and services you deal with.
Following this step, there is a verification stage where you will need to furnish details about the authorised signatory and then submit the form. Upon submission, a challan will be generated. The tax department will then review your application. If they identify any missing information or discrepancies, they will raise a query, and you’ll need to respond to it. However, if everything in your application is in order, you will be granted Goods and Services Tax Registration.
Documents Required for GST Registration
To complete the process of registration for GST, you must have the following documents:
- KYC details like Address Proof, PAN Card, Aadhaar Card, and one clear and recent passport-size photo of the promoters or directors will be required; hence, one must possess it
- Business address proof as per the registered business place will be needed
- Recent bank statements of the promoters and directors of the particular business must be attached with the application for registration of the GST.
- An authority letter will also be required; hence, it is suggested to draft it before starting the registration procedure.
- Board resolution with respect to the authorised signatory in a particular entity will be required.
Important Provisions Under GST Law
The GST law encompasses a wide range of provisions, addressing administration, tax levy and collection, input tax credit, registration, payment, refunds, audits, inspections, demands and recovery, liability, advance rulings, appeals, and penalties. Some of the important and crucial provisions given under the GST law are given below:
- Administration related provision has been given under chapter 2nd from section 3 to section 6
- Levy and collection of tax has been given under chapter 3 from section 7 to section 11
- The time and value of supplier-related provisions have been mentioned in Chapter 4 from Section 12 to Section 15
- Input tax credit is one of the very important concepts of GST in India given under Chapter 5 from Section 16 to Section 21
- Registration and related provisions have been given under Section 22 to Section 30
- Chapter 7 talks about tax invoice credit and debit notes
- Accounts and records have been given under section 35 and section 36, respectively
- The next important provision is related to the payment of tax, which has been mentioned from section 49 to section 53A
- Refunds and assessment has been given under chapter 11 and 12, respectively
- Audit, one of the important concepts of goods and services tax, has been given under Section 65 and Section 66
- Provisions related to inspection, search, seizure and arrest will be given under section 67 to section 72
- Demands and recovery have been given in Chapter 15 of the GST law
- Chapter 16 and Chapter 17 talk about liability to pay in certain cases and advance rulings, respectively
- Appeals and revision with respect to GST have been mentioned under chapter 18 from section 107 to section 121
- Offences and penalties, one of the most helpful and crucial concepts given under GST laws, is explained from section 122 to section 138
Conclusion
The introduction of GST in India in 2017 marked a pivotal moment in the nation’s tax reform history, replacing a complex array of central and state taxes with the aim of simplifying the tax system, eliminating tax cascades, and promoting digitalisation. The journey towards GST implementation was long, spanning several years of planning and legislative efforts, beginning with the drafting of GST laws in the early 2000s. The core objectives included achieving a unified national tax, consolidating various indirect taxes, reducing tax evasion, expanding the taxpayer base, and fostering digitalisation. Before GST, India had a convoluted tax landscape that included central excise duty, service tax, state VAT, and various state-specific levies. In summary, GST in India has transformed India’s tax landscape, modernising and simplifying the system while boosting transparency and efficiency.
