The Goods and Services Tax (GST) was introduced to replace the old tax structure that had an array of taxes like Value Added Tax (VAT), excise duty, sales tax, and forth. GST is a unified tax levied on all providers of taxable products and services in India. GST in India has proven to be instrumental in simplifying tax calculations and eliminating the cascading effect of the taxes mentioned above.

Essential Facts on the Goods And Services Tax

GST is classified into several GST slabs. The GST tax rates are 5%, 12%, 18%, and 28%. GST is administered by the GST council and regulated by the GST Act implemented in 2017. The Goods and Services Tax is imposed on just about every type of product and service that comes to mind. However, there exist some exceptions, such as electricity, petroleum, and so forth.

There are three GST types imposed on goods and services, namely the Central Goods and Service Tax (CGST), the State Goods and Service Tax (SGST), and the Integrated Goods and Service Tax (IGST) CGST is imposed on the customer by the central government on transactions that occur within the same state. The state government imposes SGST on sales that occur within the same state. The central government levies the IGST on supplies that happen between states.

What are the Merits and Demerits of the Goods and Services Tax?

The Goods and Services Tax has its fair share of merits and demerits. Here are some advantages of GST:

One of the main advantages is the eradication of the cascading effect of taxes or double taxation that plagued the previous tax structure. Before GST came into effect, indirect taxes like VAT would be levied, and the rates would change in every state. As a result of this, the overall prices of goods and services would turn out to be too high.

Aside from this, it eases the calculation of taxes, unlike in the previous tax system. The process of calculating tax was a lot more cumbersome back then.

Additionally, GST enables you to claim your Input Tax Credit (ITC) on the tax payments you make provided you do them on time, and you have a GST number.

Here are some demerits of GST:

While the introduction of GST has brought about some positive changes, companies are now forced to spend significant amounts of time and capital to ensure their operations are compliant with GST rules.

They also ought to spend money on updating their accounting software to comply with the GST rules or purchase new software that is capable of the same. Hiring tax professionals to help employees get on track operating under the GST regime is a significant operational expense.

What are some of the Latest GST News and Updates?

As a business owner, vendor, or customer in the GST system, you need to be up-to-date with what is going on. Here are a few pieces of news you might find intriguing:

May 6th, 2020

You are allowed to take your time in submitting the GSTR-9 annual form and GSTR-9C form as the final date for this is September 30th, 2020. The E-Way bill that was issued on or before March 24th is valid until May 31st.

May 16th, 2020

According to the Central Board of Indirect Taxes and Customs (CBIC), they are driven to ensure liquidity to GST taxpayers, specifically those in the MSME sectors. Also, they have authorized GST refund claims that come up to a total of 11,052 CR.

May 26th, 2020

The CBIC says that there exists a Special Refund and Drawback Disposal Drive intended to assist MSMEs or Exporters during the lockdown. Additionally, they made an announcement saying that 6.76 Lakh claims of IGST, Drawback, or refund that come up to Rs. 8656 CR are disposed of.

If the latest GST news is something you are interested in, this should suffice to get you started. Be sure to be on the lookout for any new information on GST. An excellent source for the latest GST news and updates is the official GST website or the CBIC website regularly.