Salient features of GST
- GST is applicable on “supply” of goods or services
- GST is based on the principle of destination (consumption based tax)
- Dual GST :- It is a dual GST with the Centre and the States simultaneously levying it on a common base.The GST to be levied by the Centre is called Central GST (CGST) and The GST to be levied by the States is called State GST (SGST) An Integrated GST (IGST) is levied on inter-State supply (including stock transfers) of goods or services. Import of goods is treated as inter-State supplies and is subject to IGST in addition to the applicable customs duties . Import of services is treated as inter-State supplies and is subject to IGST.
- CGST, SGST /UTGST & IGST is levied at rates to be mutually agreed upon by the Centre and the States under the aegis of the GSTC
- There would be four tax rates namely 5%, 12%, 18% and 28%.
- GST will apply to all goods and services except Alcohol for human consumption.
- GST rate for all types of tobacco products is 28%.GST Cess for Tobacco Products.Tobacco products is one of the items that attract the maximum amount of GST cess. The GST cess rate for tobacco products range from 11% to 290%
- Taxpayers with an aggregate turnover of Rs. 20 lakhs would be exempted from tax (The threshold exemption limit would be Rs. 20 lakh)
- Composition Scheme :- A taxpayer whose turnover is below Rs 1.5 Crores can opt in for Composition Scheme. Restaurant sector taxpayers may also opt for the scheme. Tax rate is 5%
- The government will allow the export of goods and services without payment of integrated goods and services tax (IGST) provided exporters furnish a letter of undertaking
- Input Tax Credit (ITC) :- Credit of CGST paid on inputs and Credit of SGST paid on inputs
The ITC would be permitted to be utilized in the following manner:
ITC of CGST allowed for payment of CGST & IGST in that order
ITC of SGST allowed for payment of SGST & IGST in that order
ITC of IGST allowed for payment of IGST, CGST & SGST/UTGST in that order.
ITC of CGST cannot be used for payment of SGST/UTGST and vice versa.
- Electronic filing of return :- All registered businesses have to file monthly, quarterly and/or annual GST Returns based on the type of business
- Payment of tax shall be made electronically through internet banking, or also through credit card and through the modes of Real Time Gross Settlement (RTGS) or National Electronic Funds Transfer (NEFT). Smaller taxpayers shall be allowed to pay tax over the bank counter. All challans for payment of tax shall be generated online on the Goods and Services Tax Network (GSTN).
- Self assessment :- Taxable person shall himself assess the taxes payable and credit it to the account of the Government. The return filed by the tax payer would be treated as self-assesse
- Officers would have restrictive powers of inspection, search, seizure and arrest
- Advance Ruling Authority would be constituted by States in order to enable the taxpayer to seek a binding clarity on taxation matters from the department.
- An anti-profiteering clause has been provided in order to ensure that business passes on the benefit of reduced tax incidence on goods or services or both to the consumers.