The long-awaited goods and services tax is a reality now, which subsumes most of the indirect taxes in it. While tax base will increase the complication of compliance is set to reduce. Now the tax is not on manufacturing, sale or provision of service but is on supply. The system of GST is such where the credit of the GST paid on Inward Supply can be set off towards the GST on outward supply where the chain of tax credit needs to remain intact. Under the new tax regime, all persons involved in the supply of goods or services are required to obtain registration of GST. Those who are not registered under GST shall not be allowed to collect GST from customers or claim input tax credit (ITC) on inward supply. For all current taxpayers under current tax regimes, such as excise, sales tax or vat, service tax is required to migrate their registration to GST. The migration to GST is open until three months from 26th June 2017. As of now, the GST portal is issuing the provisional registration, which shall be valid to transact business under GST Law.
The transition to GST for the existing tax payers is based on the data which is already with the tax department, the GST system will pull the data in the GST form by auto populating the same after the user verification is complete. The taxpayers shall not be able to change the PAN of the business, Legal name of the business, State, Reason of liability to obtain registration, Email and mobile number as such. However, in case the trade name is different from legal name then the same may be edited.
Advantages of GST
One Nation One Tax
GST shall be the only tax in the entire supply chain of goods or services thus shall subsume various taxes which was being levied since independence like Central Sales Tax, Additional Customs Duty, Purchase Tax, Luxury Tax, etc. this shall eventually result in easy tax management.
Lower Taxes ( NO tax on Tax)
In the previous indirect tax regime, though through reforms an effort was made to remove a tax on tax and VAT was introduced, however, there exist cases where a tax was imposed on tax. For example, vat was applied even on excise duty. The GST system ensures continuous flow of credit in the system
Same Tax Rate all over India
In the erstwhile tax system, the vat rates differ from state to state, as a result the same product was having the different price for consumer due to different indirect tax being passed on to the consumer. However, under GST the tax rates shall be same across the supply chain.
Existing Tax Payers of Excise, Vat & Service tax need to migrate to GST
Rs. 5900 /-
All start-up engaged in any trade or business will eventually require registration
Monthly Filing of Various Returns and Reconciliation Service