What is GST?

GST means Goods and Services Tax. GST is an indirect tax that has been implemented in India to displace multiple taxes. While GST registration is important and obligatory factor for your business, it’s imperative to know about GST. Prior to GST implementation in India, the tax system was divided in two parts, direct tax and indirect tax. On 29th March 2017, GST e-registration was passed in the parliament. Subsequently, the Goods and Service Tax became applicable in India since 1st July 2017, which made India, “One Nation One Tax” country in the world. Key Features of GST Regime are as mentioned below.

• GST is applicable on the “supply” of services or goods as opposed to the earlier concept of taxation on goods manufacture, sale of goods, or service provision.
• GST is a destination-based tax structure unlike the origin-based structure that existed previously. 
• CGST, IGST, and SGST/UTGST are levied at rates that would be mutually agreed upon by the states and Centre.
• Taxpayers with annual turnover of Rs.20 lakh is exempt from GST. For special category states, this cut-off is Rs.10 lakh. An option of compounding is available to small-scale taxpayers with annual turnover of Rs.50 lakh or below. The choice of threshold exemption and the compounding scheme are optional.
• Input credit of CGST shall be used only for paying CGST on the output. Similarly, input credit of SGST/UTGST will be used only for the payment of SGST/UTGST. Therefore, the two channels of input tax credit cannot be cross-utilised, except for the payment of IGST for inter-state supplies.

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