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How to calculate GST returns?

The new Goods and Services Tax (GST) has changed the way businesses use to bill their clients and or customers. If you are one those wondering how to calculate GST returns, here is a step by step guide for you:

Step 1:

The first step is to find the exact slab rate for the goods or services under the GST Act. To find GST Rate, you will have to determine the type of supply item, i.e., whether is it a good or a service. If the supply is a good, find the HSN Code and if the transaction involves the supply of a service, then find the SAC Code. Here's how to find GST HSN and SAC code

Once you know the HSN or SAC Code, then find out under which slab of GST tax rate the supply fits into. The GST Council has created 5 different slab rates at NIL/0%, 5%, 12%, 18% and 28% for both goods and services.

Step 2:

Once you know the GST rate, next find out the applicability of IGST or CGST and SGST. To do so, you need to determine the place of supply first. Mostly, the place where the supply of goods or services was done would be the address where the goods or the service was provided. But in case of e-commerce or OIDAR services, the determination of the place of supply is a more complex issue.

Step 3:

Under GST rule, the supplier of the goods or service can collect tax from the recipient and remit the same to the government. However, there are some services like 'reverse charge services', where the recipient is made liable for payment of GST.

Step 4:

According to new GST rules, suppliers must maintain extensive accounts, records and file 3 GST forms in a month. However, small businesses having a turnover of less than Rs 75 lakhs, can enrol under the GST Composition Scheme and pay a flat GST based on their aggregate turnover. You should check whether your supplier is enrolled under GST Composition Scheme or not.

Step 5:

Next is to find out the type of transactions, for example - Business to Business; Business to Consumer where the value of supply is more than Rs 2.5 lakhs; or Business to Consumer where the value of supply is less than Rs 2.5 lakhs.

GST registration: A 10 step guide

Goods and Services Tax (GST) registration is a must for every business owner whose annual turnover exceeds Rs 20 lakh. However, in some states with special status, the amount is lowered to Rs 10 lakh.

If you are a businessman and want to understand the basic process of GST Registration, here is a complete step-by-step guide to help you:

  • First step: Go to GST official website - https://reg.gst.gov.in. Click on Services tab and select Registration from the drop-down menu.
  • Second step: Now select New Registration and enter required details such as - mention whether you are a Taxpayer/GST Practitioner/Tax Deductor, then your state/ union territory, district, name, PAN number, email ID and Mobile number for OTP. Then enter verification characters and click on proceed.
  • Third step: An OTP will be sent to the email ID and Mobile number you entered in the second step. Enter that OTP and click on Continue.
  • Fourth step: A Temporary Reference Number (TRN) will reflect on your screen and same will also be sent to your registered email ID and Mobile number. Save it for future reference.
  • Fifth step: Now again go to the Services and click on Registration. This time select Temporary Reference Number (TRN)
  • Fifth step: Now again go to the Services and click on Registration. This time select Temporary Reference Number (TRN)
  • Sixth step: Enter the TRN number, verification characters and click on Proceed.
  • Seventh step:You will get an OTP on your registered email ID and Mobile number. Enter the OTP and click again on Proceed.
  • Eighth step: You will see the status of your application in a draft format. You have to now click on the edit icon.
  • Ninth step: This is the second part of the registration form and has 10 sections. Fill in all the required details and submit upload the requested documents.
  • Keep handy these documents:

    1. Photographs
    2. Constitution of the taxpayer
    3. Proof of the place of business
    4. Bank account details
    5. Authorization form
  • Tenth step: Once you have uploaded all the details and documents, go to the Verification page. Tick on the declaration and submit the application using any of the following options:
    1. Companies must submit application using DSC
    2. Using e-Sign - OTP will be sent to Aadhaar registered number
    3. Using EVC - OTP will be sent to the registered mobile
    A success message will be displayed on the screen and you will receive an Application Reference Number (ARN) on your registered email ID and mobile number. Later, you can check the status for your registration by entering the ARN in GST Portal.

GST rates for various goods and services in India

There is a lot of confusion regarding The Goods and Services Tax (GST) in the market. One of the most awaited tax reforms in India; GST was introduced in July 2017 with an aim to make India 'one nation, one market, one tax'. However, with the rollout of GST tax slab for various goods and services changed. The government has categorized 1211 items under various tax slabs.

Here is a complete guide to various tax slabs applicable on goods and services for the year 2017:

The GST Council in its 23rd meeting on November 10, 2017 recommended widespread changes in the Goods and Services Tax (GST). The council has decided to keep the highest 28% tax on on luxury and sinful items as a result 177 items have been shifted to the 18% bracket. GST on many items have also been reduced.

The government has categorized items in five major slabs - 0%, 5%, 12%, 18% and 28%.

Here is the updated list of goods and services taxed under various GST slabs..

No tax(0%)

Goods

No tax will be imposed on items like jute, fresh meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, bindi. Sindoor, stamps, judicial papers, printed books, newspapers, bangles, handloom, Bones and horn cores, bone grist, bone meal, etc.; hoof meal, horn meal, Cereal grains hulled, Palmyra jaggery, Salt - all types, Kajal, Children's' picture, drawing or colouring books, Human hair, Khadi purchased from Khadi and Village Industries stores, Clay idols, brooms, Cotton seed oil cake,Charkha, Guar meal, hop cone, certain dried vegetables, unworked coconut shell and fish, and bangles of lac/shellac.

Services

Hotels and lodges with tariff below Rs 1,000, Grandfathering service has been exempted under GST. Rough precious and semi-precious stones will attract GST rate of 0.25 per cent, admission to "protected monuments",

0.25%

Rough industrial diamonds including unsorted rough diamonds to face 0.25% instead of 3% GST.

5%

Goods

Items such as fish fillet, apparel below Rs 1000, packaged food items, footwear below Rs 500, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats, Cashew nut, Cashew nut in shell, Raisin, Ice and snow, Bio gas, Insulin, Agarbatti, Kites, Postage or revenue stamps, stamp-post marks, first-day covers, Branded food, walnuts, dried tamarind, roasted gram, Dhoopbatti, Corduroy fabric, saree fall, Paper macheitems,Oil cakes, Duty Credit Scrips,Cotton quilts(quilts not exceeding Rs 1000 per piece),corals,Rosaries and prayer beads,Hawansamagri,Grass, leaf and reed and fibreproducts,including mats, pouches, wallets, mangoes sliced dried, Khakra and plain chapati / roti, branded Namkeens, Ayurvedic, Unani, Siddha, Homeopathy medicines; Paper waste or scrap; Real Zari; Plastic waste, parings or scrap; Rubber waste, parings or scrap; Hard Rubber waste or scrap; Paper waste or scrap; Real Zari; Cullet or other waste or scrap of Glass; E-Waste; Biomass briquettes; Desiccated coconut, Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit; Idli and dosa batter; Finished leather; chamois and composition leather; Coir cordage and ropes, jute twine, coir products; Fishing net and fishing hooks; Worn clothing; Fly ash brick; aircraft tyres, puffed rice chikki, flour of potatoes, chutney power, fly sulphur recovered in refining crude and fly ash.

Services

All restaurants, restaurants of hotels with room tariff of less than Rs 7,500, Food parcels, Textile job work, Transport services (Railways, air transport); Supply of e-waste

12%

Goods

Apparel above Rs 1000, frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture books, umbrella, sewing machine, cellphones, Ketchup & Sauces, All diagnostic kits and reagents, Exercise books and note books, Spoons, forks, ladles, skimmers, cake servers, fish knives, tongs, Spectacles, corrective, Playing cards, chess board, carom board and other board games, like ludo, rubber band, Wood, stone, metals, marble idols,Table and kitchenware,Batters, including idli / dosa batter, Textile caps,sprinklers,Cotton quilts(quilts exceeding Rs 1000 per piece),Statues, statuettes, pedestals,ceramic articles, porcelain items, ornamental articles, bells, gongs, non-electric of base metal,animal carving material, synthetic filament yarn, such as nylon, polyester, acrylic, etc; artificial filament yarn, such as viscose rayon, Cuprammonium; Sewing thread of manmade staple fibres; Yarn of manmade staple fibres;

On Nov 10, 2017, these items have been shifted from 18% to 12% tax bracket: Condensed milk, Refined sugar and sugar cubes, Pasta, Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasoning, Diabetic food, Medicinal grade oxygen, Printing ink, Hand bags and shopping bags of jute and cotton, Hats (knitted or crocheted), Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery, Specified parts of sewing machine Spectacles frames, Furniture wholly made of bamboo or cane

Services

State-run lotteries, Non-AC hotels, business class air ticket, fertilisers, Work contracts

18%

Goods

Most items are under this tax slab which include footwear costing more than Rs 500, Trademarks, goodwill, software, Bidi Patta, Biscuits (All categories), flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelopes, tampons, note books, steel products, printed circuits, camera, speakers, Kajal pencil sticks, Headgear and parts thereof, Aluminium foil, Weighing Machinery [other than electric or electronic weighing machinery], Printers [other than multifunction printers], Electrical Transformer, CCTV, Optical Fiber, Bamboo furniture, Swimming pools and padding pools, Curry paste; mayonnaise and salad dressings; mixed condiments and mixed seasonings, Tractor parts, raincoats, Medical grade disposable gloves, Computer monitors(up to 20 inch),Custard powder,Rice rubber rolls for paddy de-husking machine,Kitchen gas lighters, poster Colour; Modelling paste for children amusement Fittings for loose-leaf binders or files, letter clips, letter corners, paper clips, indexing tags and similar office articles, of base metal; staples in strips; aircraft engines

On Nov 10 these items were moved from 28% to 18% bracket:

Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches, sockets, fuses, relays, electrical connectors ,Electrical boards, panels, consoles, cabinets etc for electric control or distribution Particle/fibre boards and ply wood. Article of wood, wooden frame, paving block ,Furniture, mattress, bedding and similar furnishing Trunk, suitcase, vanity cases, brief cases, travelling bags and other hand bags, cases ,Detergents, washing and cleaning preparations ,Liquid or cream for washing the skin, Shampoos; Hair cream, Hair dyes (natural, herbal or synthetic) and similar other goods; henna powder or paste, not mixed with any other ingredient; Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, perfumery, cosmetic or toilet preparations, room deodoriser ,Perfumes and toilet waters ,Beauty or make-up preparations ,Fans, pumps, compressors ,Lamp and light fitting Primary cell and primary batteries ,Sanitary ware and parts thereof of all kind ,Articles of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic ,Slabs of marbles and granite Goods of marble and granite such as tiles ,Ceramic tiles of all kinds ,Miscellaneous articles such as vacuum flasks, lighters, Wrist watches, clocks, watch movement, watch cases, straps, parts

Article of apparel & clothing accessories of leather, guts, furskin, artificial fur and other articles such as saddlery and harness for any animal

Articles of cutlery, stoves, cookers and similar non electric domestic appliances

Razor and razor blades ,Multi-functional printers, cartridges ,Office or desk equipment ,Door, windows and frames of aluminium.

Articles of plaster such as board, sheet, Articles of cement or concrete or stone and artificial stone,

Articles of asphalt or slate, Articles of mica ,Ceramic flooring blocks, pipes, conduit, pipe fitting

Wall paper and wall covering ,Glass of all kinds and articles thereof such as mirror, safety glass, sheets, glassware ,Electrical, electronic weighing machinery ,Fire extinguishers and fire extinguishing charge

Fork lifts, lifting and handling equipment, Bull dozers, excavators, loaders, road rollers,

Earth moving and levelling machinery, Escalators .

Cooling towers, pressure vessels, reactors ,Crankshaft for sewing machine, tailor's dummies, bearing housings, gears and gearing; ball or roller screws; gaskets ,Electrical apparatus for radio and television broadcasting ,Sound recording or reproducing apparatus ,Signalling, safety or traffic control equipment for transports ,Physical exercise equipment, festival and carnival equipment, swings, shooting galleries, roundabouts,gymnastic and athletic equipment

All musical instruments and their parts

Services

Restaurants in hotel premises having room tariff of Rs 7500 and above, telecom services, IT services, branded garments and financial services, Outdoor catering

28%

Goods

In total 50 luxury and sin products will be taxed at 28% which includes Bidis, molasses, pan masala, aerated water, paint, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, automobiles, motorcycles, aircraft for personal use

Services

Private-run lotteries authorised by the states, race club betting, cinema will attract tax 28 per cent tax slab under GST

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