Ramesh Chandra Jena GST Smart Guide

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GST Smart Guide – Complete Content

1. Introduction to GST

• What is GST?
  GST (Goods and Services Tax) is a unified, destination-based indirect tax levied on the supply of goods and services in India. It replaced multiple taxes like VAT, service tax, excise duty, etc.

• Features of GST:

  • One nation, one tax

  • Destination-based taxation

  • Seamless Input Tax Credit (ITC)

  • Dual structure: CGST + SGST (intra-state), IGST (inter-state)

2. Types of GST

• CGST – Central Goods and Services Tax

• SGST – State Goods and Services Tax

• IGST – Integrated Goods and Services Tax

• UTGST – Union Territory GST

3. GST Registration

• Who should register?

  • Businesses with aggregate turnover above the threshold limit (?20/40 lakh depending on the state and nature of supply)

  • Casual taxable persons

  • Non-resident taxable persons

  • Input service distributors, e-commerce operators

• How to register:
  Online on the  using PAN, mobile number, email, and business documents.

4. GST Returns & Compliance

• Key GST Returns:

  • GSTR-1: Details of outward supplies

  • GSTR-3B: Monthly summary return

  • GSTR-9: Annual return

  • GSTR-4: Composition scheme return

• Due Dates & Late Fees:
  Penalties for late filing include ?50/day (?20/day for nil returns) and interest at 18% p.a. on tax liability.

5. Input Tax Credit (ITC)

• What is ITC?
  ITC allows you to deduct the tax you’ve paid on purchases from the tax you owe on sales.

• Conditions to claim ITC:

  • Possession of tax invoice

  • Receipt of goods/services

  • Supplier has filed GST return

  • Tax is paid to the government

• Blocked credits:
  Certain expenses like motor vehicles, personal use items, and gifts are not eligible for ITC.

6. Reverse Charge Mechanism (RCM)

• Under RCM, the recipient of goods/services pays GST instead of the supplier.

• When RCM applies:

  • Notified services (e.g., legal services, GTA, import of services)

  • Purchase from unregistered suppliers (in limited cases)

7. Composition Scheme

• For small taxpayers with turnover up to ?1.5 crore.

• Benefits:

  • Lower tax rate (1% for traders, 5% for restaurants)

  • Less compliance burden

• Limitations:

  • Cannot collect tax from customers

  • No ITC benefit

  • Not applicable to service providers (except restaurant services)

8. Invoicing & E-Invoicing

• GST-compliant invoice must include:

  • GSTIN of supplier and recipient

  • HSN/SAC code

  • Description of goods/services

  • Taxable value and GST amount

• E-Invoicing:
  Mandatory for businesses with turnover above the notified limit (currently ?5 crore+). Invoices must be registered on the Invoice Registration Portal (IRP).

9. GST Rates & HSN Codes

• GST Rate Slabs:

  • 0%, 5%, 12%, 18%, and 28%

• HSN Code (for goods) and SAC Code (for services) are used to classify goods/services for GST rates.

10. Special Topics

• Exports & SEZ supplies:
  Treated as zero-rated. Can claim refund of ITC or IGST paid.

• Job Work:
  Special rules for sending goods to a job worker and receiving them back.

• TDS and TCS under GST:
  Applicable for government entities (TDS) and e-commerce operators (TCS).

11. Penalties & Offences

• Common offences:

  • Not registering under GST

  • Supplying without invoice

  • Claiming fake ITC

  • Failing to file returns

• Penalties:

  • ?10,000 or the amount of tax evaded, whichever is higher

  • Prosecution in severe cases

12. GST Audit & Annual Return

• Annual Return (GSTR-9):
  Mandatory for businesses with turnover above ?2 crore.

• Reconciliation & audit:
  Businesses must reconcile books with returns and perform self-audit (mandatory audit if turnover > ?5 crore as per earlier provisions).

13. Practical Tips for GST Compliance

• Maintain accurate records and invoices

• File returns on time to avoid penalties

• Reconcile purchase register with GSTR-2B

• Stay updated with GST Council changes

• Use GST-compliant accounting software

14. GST FAQs

Q1. Can I voluntarily register for GST?
Yes, even if turnover is below the threshold.

Q2. Is ITC available on capital goods?
Yes, for business use.

Q3. Can I switch between regular and composition scheme?
Yes, but only at the beginning of the financial year with due intimation.

Conclusion

The GST Smart Guide empowers users to confidently manage GST compliance through clear understanding and structured steps. With regular updates, digital tools, and simplified processes, navigating GST can become a smooth, systematic part of doing business in India.