GST Taxation

Tax base of GST would be very wide and would comprehensively extend over all goods and services up to the final consumer point. GST would have two components:

  • CGST It would be levied by the Centre; and

  • SGST It would be levied by the States.

The basic features of law such as chargeability, definition of taxable event, taxable person, taxable transaction, basis of classification all would be uniform for both CGST and SGST, i.e. the basis of taxability would be same for both CGST as well as SGST, thereby wiping out all the disputes currently taken up by VAT/Sales tax authorities and Service tax authorities to tax a single transaction.

Meaning of Goods and services

  • “Goods’’ means every kind of movable property other than actionable claim and money but includes securities, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under the contract of supply.
  • “Services’’ mean anything other than goods.

Taxation principle

  • GST will follow the destination principle i.e. impact of GST would fall on the person finally consuming the commodity. Also tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed.
  • GST would be structured on the destination principle, as a result of this, tax base will shift from production to consumption whereby imports will be liable to both CGST and SGST and exports should be relieved from the burden of GST by zero rating. Consequently, revenue will accrue to the State in which the consumption takes place or is deemed to take place.

Time Of Supply

The time of supply of goods/services shall be the earliest of the following dates, namely,-

  • The date on which the goods/services are removed or the date on which the goods are made available to the recipient.

  • The date on which the supplier issues the invoice.

  • The date on which the supplier receives the payment.

  • The date on which the recipient shows the receipt of the goods/services in his books of account.

Tax Payment

Payment of tax can be made in following modes:

  • Through debit of credit ledger of tax payer maintained on common portal, but interest, penalty and fees cannot be paid through the credit ledger.

  • In cash by debit in cash ledger of the taxpayer maintained on the common portal. Money can be deposited in the cash ledger by e-payment (internet banking, credit card, debit card), RTGS, NEFT, over the counter payment in branches of banks authorized to accept deposit of GST.

  • The last date of payment of tax is on 20th day of succeeding month and for the month of March date of payment is 20th April. For composition tax payers last date of payment of tax is 20th of the month succeeding the quarter. Timing of payment will be from 12 am to 8 pm.
  • TDS: Govt. & govt. undertaking and other notified entities making contractual payment in excess of Rs.10 Lakh to suppliers then such authorities need to deduct 1% of total amount payable while making payment. TDS deducted will be reflected in electronic cash ledger of supplier.
  • TDS deductor needs to remit such TDS collected by the 10th day of the month succeeding the month in which TDS was collected and reported in GSTR 7.
  • TDS deductor shall issue TDS certificate within 5 days of deduction of TDS, failing which fees of 100 per day subject to maximum of Rs. 5000 will be payable by deductor.
  • Every E-commerce operator shall withhold certain percentage of amount due from him to the supplier. Such withheld amount shall be deposited within 10th of the next month.
  • The taxpayer would be required to pre-register his credit card, from which the tax payment is intended, with the Common Portal maintained on GSTN.

How will imports be taxed under GST?

The Additional Duty of Excise or CVD and the Special Additional Duty or SAD presently being levied on imports will be subsumed under GST. IGST will be levied on all imports into the territory of India. Unlike in the present regime, the States where imported goods are consumed will now gain their share from this IGST paid on imported goods.