How-To Understand and Navigate India’s Goods and Services Tax (GST) Law

Step 1: Understand the Basics of GST

Start by familiarizing yourself with the basics of India’s Goods and Services Tax (GST) law. GST is a multi-stage tax that is levied on every value addition. This indirect tax has replaced many of the previous central and state taxes like excise duty, VAT, service tax, etc. There are three types of GST in India – Central GST (CGST), State GST (SGST), and Integrated GST (IGST).

Step 2: Know the Tax Slabs

GST is divided into four tax slabs: 5%, 12%, 18% and 28%. The Indian government has categorized all goods and services under these four slabs. Familiarize yourself with the items under each slab to understand your tax liability.

Step 3: Understand Taxable Person under GST

A taxable person under GST is anyone who carries on any business at any place in India and who is registered or required to register under GST. Registering for GST is mandatory for entities having a turnover of more than Rs. 20 lakhs (Rs. 10 lakhs for NE and hill states).

Step 4: Register for GST

To do business in India and to charge GST from your customers, you must register for GST. You can register for GST online on the official government portal. After registration, a unique registration number will be given to you based on your state code and PAN.

Step 5: Understand Input Tax Credit

Input Tax Credit means reducing the taxes paid on inputs from taxes to be paid on output. When any supply of services or goods is provided to a taxable person, the GST charged is known as Input Tax. This mechanism helps in eliminating the cascading effect of taxes.

Step 6: Filing GST Returns

Every individual registered under the GST Act has to periodically furnish the details of sales and purchases along with tax collected and paid thereon. This process is called filing GST returns. These returns are filed online. The due date for filing GST returns is based on your turnover and type of taxpayer.

Step 7: Get Professional Help

GST is a complex law with several compliances to adhere to. Seeking professional help ensures that you understand and navigate GST law accurately and effectively. Chartered Accountants and GST Practitioners can provide expert advice and assistance.

Step 8: Stay Updated

GST is a dynamic law, the provisions of which are constantly changing. It is vital to stay updated with these changes by following news updates, official notifications, or subscribing to GST related informational services.

Navigating the GST law is a challenging task that requires constant learning and understanding. The above steps provide a basic guide, but you should seek professional advice for specific cases and scenarios to successfully operate under the purview of the GST Act.