GST Consultant

We are GST Consultant in Ujjain

What is GST?

GST is an Indirect Tax which has replaced numerous Indirect Taxes in India. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into existence on first July 2017; Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is imposed on every value added.

In basic words, Goods and Service Tax (GST) is an indirect tax imposed on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India.

GST is one indirect tax for the whole nation.

Multi-stage

An item passes through many hands in its supply chain: starting from a manufacturer to the final sale of product to a consumer. The stages involved are as follows:
  • Purchase of raw materials
  • Manufacturing
  • Warehousing of finished products
  • Selling to a wholesaler
  • Selling by a wholesaler to a retailer
  • Selling by retailer to the final consumer

Value Added

The manufacturer who makes chocolates buys cocoa powder, sugar and other material. The value of the inputs increases when the sugar, cocoa powder and other material are mixed to make chocolates. The manufacturer then sells the chocolates to the warehousing agent who packs large quantities of chocolates and labels it. That is another value added after which the warehouse sells it to the retailer. The retailer packages the chocolates in smaller quantities and invests in the marketing of the chocolates thus increasing its value. GST is levied on these value added each time i.e. the monetary value added at each stage to achieve the final sale to the end customer.

Destination-Based

Consider goods manufactured in Maharashtra and are sold to the final consumer in Punjab. Since Goods & Service Tax is levied at the point of consumption. So, the entire tax revenue will go to Punjab and not Maharashtra.

Advantages of GST

Benefits For Business:
  • Removes Cascading of Tax
  • Doing business is easy as GST is standard throughout the nation
  • Increased Exemption limit for Small traders or service providers
  • Small Business Benefit from the Composition scheme
Benefits For Governments (Central & State)
  • Ease of Administration
  • Higher Revenue
  • Rise in Investment in India
  • Increased tax compliance
Benefits For Economy
  • Less Tax Evasion and Corruption
  • Growth of GDP
Benefits For Consumer
  • Transparency
  • Reduced cost and overall relief in Tax

Components of GST

There are 3 Taxes applicable under this system:
  • CGST: Collected by the Central Government on an intra-state sale (Eg: transaction happening within the same state)
  • SGST: Collected by the State Government on an intra-state sale (Eg: transaction happening within the same state)
  • IGST: Collected by the Central Government for inter-state sale (Eg: One state to another state)

When Is Tax Imposed?

A taxable event such as manufacturing, selling and provision of a good has to occur for tax to be collected. Under the previous system, each taxable event is subject to multiple taxes such as excise, VAT/ CST and service tax. But under GST, products will no longer have multiple taxes, and will not incur excise duty as well as VAT at different points of time. There will no longer be any difference between goods and services in terms of taxation.

An example of this is when we go out to eat at a restaurant. Earlier, the customer paid both VAT and service tax on a single bill, but after GST there is single tax charged on the bill amount. Best GST Consultant will be required to file GST returns.

This leads us to an important concept in GST – Time, Place, and Value of Supply of goods and services.

To enrol for GST Registration please click here

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We offer a consultation to individuals and businesses.

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