GST: The Single Biggest Tax Reform Undertaken Since Independence to Ease Compliance
GST stands for Goods and Services Tax, which will be levied on the supply of goods or services or both in India. GST will subsume a number of existing indirect taxes being levied by the Centre and State Governments,
including Central Excise duty, Service Tax, VAT, Purchase Tax, Central Sales Tax, Entry Tax, Local Body Taxes, Octroi, Luxury Tax, etc.
It brings benefits to all the stakeholders viz. industry, government and the citizens. It is expected to lower the cost of goods and services, boost the economy and make our products and services globally competitive.
GST aims to make India a common national market with uniform tax rates and procedures and removes the economic barriers, thereby paving the way for an integrated economy at the national level. By subsuming most of the Central and State indirect taxes into a single tax and by allowing a set-off of prior-stage taxes for the transactions across the entire value chain, GST would mitigate the ill effects of cascading and thereby improve our competitiveness.
GST is a destination based consumption tax. It has been designed in a manner so that the tax is collected at every stage and the credit of tax paid at the previous stage is available to set off the tax to be paid at the next stage of transaction, thereby eliminating cascading of taxes. This eradicates “tax on tax” and allows cross utilization of input tax credits, which benefit the industry by making the entire supply chain tax neutral.
GST (GOODS AND SERVICES TAX) BENEFITS
GST will give a major boost to the ‘Make in India’ initiative of the Government by making goods or services produced or provided in India competitive in the national and international markets. Further, all imported goods will be charged with integrated tax (IGST), which will be more or less equivalent to Central GST + State GST. This brings parity in taxation on local and imported products.
Under the GST regime, exports will be zero rated in entirety unlike the present system where refund of some taxes is not allowed due to fragmented nature of indirect taxes between the Centre and the States.
All taxes paid on the goods or services exported or on the inputs or input services used in the supply of such export goods or services shall be refunded. The principle of exporting only the cost of goods or services
and not taxes would be followed. This will boost Indian exports, thereby improving the balance of payments position. Exporters will be facilitated by grant of provisional refund of 90% of their claims within seven days of issue of acknowledgement of their application, thereby resulting in the easing of position with respect to cash flows.
GST is expected to bring buoyancy to the Government Revenue by widening the tax base and improving the taxpayer compliance. GST is likely to improve India’s ranking in the Ease of Doing Business Index and is estimated to increase the GDP by 1.5% to 2%. GST will prevent cascading of taxes by providing a comprehensive input tax credit mechanism across the entire supply chain. The seamless availability of Input Tax Credit across goods or services at every stage of supply will enable streamlining of business operations. Uniform GST rates will reduce the incentive for evasion by eliminating rate arbitrage between neighbouring States and that between intra and inter-State sales.
Harmonization of laws, procedures and rates of tax will make compliance easier and simple. There would be common definitions, common forms/formats, common interface through GST portal, resulting in efficiencies and synergies across the board. This will also remove multiple taxation of same transactions and inter-State disputes like the ones on entry tax and e-commerce taxation existing today. All this will also help in reduction of compliance costs, alleviate the need for multiple record keeping for a variety of taxes, leading to lesser investment of resources and manpower in maintaining records.
Common procedures for registration of taxpayers, refund of taxes, uniform formats of tax return, common tax base, common system of classification of goods or services along with timelines for every activity will lend greater certainty to taxation system. GST is largely technology driven. The interface of the taxpayer with the tax authorities will be through the common portal (GSTN). There will be simplified and automated procedures for various processes such as registration, returns, refunds, tax payments, etc. All processes, be it of applying for registration, filing of returns, payment of taxes, filing of refund claims etc., would be done online through GSTN. The input tax credit will be verified online. Electronic matching of input tax credit across India will make the process more transparent and accountable. This will encourage a culture of compliance. This will also greatly reduce the human interface between the taxpayer and the tax administration, leading to speedy decisions.
Average tax burden on trade and industry is likely to come down, which is expected to reduce prices, resulting in more consumption, which in turn means more production and thereby boosting the growth of the industries. The removal of cascading of taxes and increased transparency will make the citizens more informed about the taxes they pay while purchasing goods or services. GST will boost domestic demand, create more opportunities for domestic business and drive job creation. GST might not be the panacea for all the ills of indirect tax system but is also not far from that.
All States Eway Bill Notifications/Forms/Limit : Click Here
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what is full form of ARN Number?
Application Reference Number ( ARN NUMBER)
You will receive an ARN Number after Filling your Registration Form on GST Network website gst.gov.in
This ARN Number will be received on your registered Email ID
Format of GST ARN Number :
- First two digits of your ARN Number is AA albhabets
- Next two digits of your ARN Number is your State Code
- Next two digits of your ARN Number is Month.
- Next two digits of your ARN Number belongs to the Year.
- Next six digits of your ARN Number is System generated Code
- Last digits of your ARN Number is for check code.
Other gst.gov.in (GST portal) searches :
Search via GSTIN (Search Tax Payer via GST Number) : Click Here
Track Your GSTIN Provision ID (Provision Identification Number) : Click Here
Check GST Payment Status : Click Here
Check GST Registration Status via PAN Number : Click Here
Check GST Registration Status via Registration Number : Click Here
Search taxpayer opted In/ Out for Composition : Clik Here
Search Office Addresses : Click Here
What is meaning of GSTIN? What is the Full form of GSTIN?
GSTIN is a unique 15 Digits code that has been issued/alloted to taxpayers covered under GST.
Full Form of GSTIN : GOODS AND SERVICES TAX IDENTIFICATION NUMBER
15 Digits GSTIN Number Format detailed :
- The First two digits of GSTIN is your State Code.
- The Next ten digits of GSTIN is PAN Number of the Business entity/proprietor.
- Thirteenth digit of your GSTIN is based on the number of registrations done by the business entity within a state.
- Fourteen digit of your GSTIN Number is Z by default.
- The Last digit of your GSTIN check code.
Check GST registration status/Track GSTIN : Click Here
Check Your ARN Number Status : Click Here
Check GST Payment Status : Click Here
Continue Reading : Beginners Guide to GST India
|Sr. No.||State Name||State Code For GST/ First Two digits of GSTIN|
|1||Andaman and Nicobar Islands||35|
|3||Andhra Pradesh (New)||37|
|9||Dadra and Nagar Haveli||26|
|10||Daman and Diu||25|
|16||Jammu and Kashmir||1|
The first 2 digits of the GSTIN is the State code, next 10 digits are the PAN of the legal entity, the next two digits are for entity code, and the last digit is check sum number. Know about GST India : Click Here
Complete list of Items of Goods on which no Levy of GST (Nil GST Rate). Schedule of Goods items on which applicability of GST is NIL. HSN Code (Harmonized System of Nomenclature) list of items on which GST rate is NIL. GST Tariff of India of Tax Free Items :
|S.NO.||Heading||HSN (Four digit)||IGST||CGST||SGST||Compensation cess|
|1||All goods other than live horses ,Live asses,mules and hinnies||0101||0%||0%||0%||0%|
|2||Live bovine animals||0102||0%||0%||0%||0%|
|4||Live sheep and goats||0104||0%||0%||0%||0%|
|5||Live poultry, that is to say, fowls of the species gallus domesticus, ducks, geese, turkeys and guinea fowls||0105||0%||0%||0%||0%|
|6||Other live animals||0106||0%||0%||0%||0%|
|7||Meat of bovine animals, fresh and chilled||0201||0%||0%||0%||0%|
|8||Meat of swine,fresh or chilled other than frozen||0203||0%||0%||0%||0%|
|9||Meat of sheep or goats,fresh or chilled||0204||0%||0%||0%||0%|
|10||Meat of horses ,asses,mules or hinnies,fresh or chilled||0205||0%||0%||0%||0%|
|11||Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, fresh or chilled||0206||0%||0%||0%||0%|
|12||Meat and edible offal,of the poultry of heading 0105,fresh or chilled||0207||0%||0%||0%||0%|
|13||Other meat and edible meat offal,fresh or chilled||0208||0%||0%||0%||0%|
|14||Pig fat ,free of lean meat,and poultry fat,nnot rendered or otherwise extracted ,fresh,chilled||0209||0%||0%||0%||0%|
|16||Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304||0302||0%||0%||0%||0%|
|17||Fish fillets and other fish meat (whether or not minced), fresh or chilled||0304||0%||0%||0%||0%|
|18||Crustaceans, whether in shell or not, live, fresh or chilled ;crustaceans,in shell ,cooked by streaming or by boiling in water,chilled||0306||0%||0%||0%||0%|
|19||Molluscs,whether in shell or not,live ,fresh ,chilled;aquatic invertebrates other than crustaceans and molluscs,live,fresh ,chilled||0307||0%||0%||0%||0%|
|20||Aquatic invertebrates other than crustaceans and molluscs,live,fresh or chilled||0308||0%||0%||0%||0%|
|21||Milk and cream, not concentrated nor containing added sugar or other sweetening matter excluding ultra high temperature milk||0401||0%||0%||0%||0%|
|23||Chena or paneer and curd||0406||0%||0%||0%||0%|
|24||Birds' eggs, in shell, fresh, preserved or cooked||0407||0%||0%||0%||0%|
|25||Natural honey,other than put up in unit container and bearing a registered brand name||0409||0%||0%||0%||0%|
|26||Human hair, unworked, whether or not washed or scoured; waste of human hair||0501||0%||0%||0%||0%|
|27||Semen including frozen semen||0511||0%||0%||0%||0%|
|28||Bulbs, tubers, tuberous roots, corms, crowns and rhizomes, dormant, in growth or in flower; chicory plants and roots other than roots of heading 1212||0601||0%||0%||0%||0%|
|29||Other live plants (including their roots), cuttings and slips; mushroom spawn||0602||0%||0%||0%||0%|
|30||Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared||0603||0%||0%||0%||0%|
|31||Foliage, branches and other parts of plants, without flowers or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared||0604||0%||0%||0%||0%|
|32||Potatoes, fresh or chilled||0701||0%||0%||0%||0%|
|33||Tomatoes,fresh or chilled||0702||0%||0%||0%||0%|
|34||Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled||0703||0%||0%||0%||0%|
|35||Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled||0704||0%||0%||0%||0%|
|36||Lettuce(Lactucasativa) and chicory(Cichorium spp), fresh or chilled||0705||0%||0%||0%||0%|
|37||Carrots, turnips, salad beetroot, salsify, celeriac, radishes and similar edible roots, fresh or chilled||0706||0%||0%||0%||0%|
|38||Cucumbers and gherkins,fresh or chilled||0707||0%||0%||0%||0%|
|39||Leguminous vegetables, shelled or unshelled, fresh or chilled||0708||0%||0%||0%||0%|
|40||Other vegetables, fresh or chilled||0709||0%||0%||0%||0%|
|41||Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared||0712||0%||0%||0%||0%|
|42||Dried leguminous vegetables, shelled, whether or not skinned or split||0713||0%||0%||0%||0%|
|43||Manioc ,arrowroot,salep,jerusalem artichokes,sweet potatoes and similar roots and tubers with high starch or inulin cintent,fresh or chilled;sago pith||0714||0%||0%||0%||0%|
|44||Coconuts,fresh or dried,whether or not shelled or peeled||0801||0%||0%||0%||0%|
|45||Other nuts,fresh such as Almonds,Hazelnuts or filberts,walnuts,chestnuts Pistachios,Macadamia nuts,Kola nuts Areca nuts||0802||0%||0%||0%||0%|
|46||Bananas, including plantains, fresh or dried||0803||0%||0%||0%||0%|
|47||Dates, figs, pineapples, avocados, guavas, mangoes, and mangosteens, fresh||0804||0%||0%||0%||0%|
|48||Citrus fruit, fresh||0805||0%||0%||0%||0%|
|50||Melons (including watermelons) and papaws (papayas), fresh||0807||0%||0%||0%||0%|
|51||Apples, pears and quinces, fresh||0808||0%||0%||0%||0%|
|52||Apricots, cherries, peaches (including nectarines), plums and soles, fresh||0809||0%||0%||0%||0%|
|53||Other fruit, fresh||0810||0%||0%||0%||0%|
|54||Peel of citrus fruit or melons,fresh||0814||0%||0%||0%||0%|
|55||Coffee beans,not roasted||0901||0%||0%||0%||0%|
|56||Unprocessed green leaves of tea||0902||0%||0%||0%||0%|
|57||Fresh ginger and fresh turmeric other than in processed form||0910||0%||0%||0%||0%|
|58||Wheat and Meslin||1001||0%||0%||0%||0%|
|65||Buckwheat, millet and canary seeds; other cereals||1008||0%||0%||0%||0%|
|66||Flour,Aata ,maida ,besan (other than bearing a registered brand name)||1101||0%||0%||0%||0%|
|67||Wheat or meslin flour||1101||0%||0%||0%||0%|
|68||Cereal flours other than that of wheat or meslin||1102||0%||0%||0%||0%|
|69||Cereal groats, meal and pellets other than bearing a registered brand name||1103||0%||0%||0%||0%|
|71||Flour,of the dried leguminous vegetables of heading 0713(pulses),of sago or of roots or tubers of heading 0714 or of the products of chapter8 i.e.of tamarind ,of singoda,mango flour,etc.||1106||0%||0%||0%||0%|
|72||All goods of seed quality-Soya beans, whether or not broken||1201||0%||0%||0%||0%|
|73||Ground nuts, roasted or otherwise cooked,whether or not shelled or broken||1202||0%||0%||0%||0%|
|74||All goods of seed quality -Linseed, whether or not broken||1204||0%||0%||0%||0%|
|75||All goods of seed quality -Rape or colza seeds, whether or not broken||1205||0%||0%||0%||0%|
|76||Sunflower seeds, whether or not broken||1206||0%||0%||0%||0%|
|77||All goods of seeds quality-Other oil seeds and oleaginous fruits, whether or not broken||1207||0%||0%||0%||0%|
|78||Seeds, fruit and spores, of a kind used for sowing||1209||0%||0%||0%||0%|
|80||Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled||1211||0%||0%||0%||0%|
|81||Locust beans, seaweeds and other algae, sugar beet and sugarcane, fresh or chilled||1212||0%||0%||0%||0%|
|82||Cereal straw and husks,unprepared ,whether or not chopped,ground,pressed or in the form of pellets||1213||0%||0%||0%||0%|
|83||Swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether or not in the form of pellets||1214||0%||0%||0%||0%|
|84||Lac and shellac||1301||0%||0%||0%||0%|
|88||Puffed rice,commonly known as Muri,flattened or beaten rice,commonly known as Chira,Parched rice,commonly known as khoi,parched paddy or rice coated with sugar or gur,commonly knnown as Murki||1904||0%||0%||0%||0%|
|89||Bread(brannded or otherwise), except when served for consumption||1905||0%||0%||0%||0%|
|90||Pappad,by whatever name it is known ,except when served for consumption||1905||0%||0%||0%||0%|
|91||Prasadam supplied by religious places||2106||0%||0%||0%||0%|
|92||Water (other than aerated ,mineral ,purified ,distilled ,medicinal ,ionic ,battery ,de-mineralized and water sold in sealed container and Non alcoholic Toddy,Neera||2201||0%||0%||0%||0%|
|93||Tender coconut water and bearing a registered brand name||2202||0%||0%||0%||0%|
|94||Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants||2302||0%||0%||0%||0%|
|95||Oil-cake and other solid residues whether or not ground or in the form of pellets, resulting from the extraction of soyabean oil||2304||0%||0%||0%||0%|
|96||Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of ground-nut oil||2305||0%||0%||0%||0%|
|97||Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of vegetable fats or oils, other than those of heading 2304 or 2305||2306||0%||0%||0%||0%|
|98||Preparations of a kind used in animal feeding||2309||0%||0%||0%||0%|
|99||Common salt including iodized and other fortified salts,sendha namak(rock salt),kala namak||2501||0%||0%||0%||0%|
|100||Human blood and its components||3002||0%||0%||0%||0%|
|101||All type of contraceptives||3006||0%||0%||0%||0%|
|102||Animal or vegetable fertilisers, whether or not mixed together or chemically treated; fertilisers produced by the mixing or chemical treatment of animal or vegetable products||3101||0%||0%||0%||0%|
|103||-Organic manure ,other than put up in unit containers and bearing a brand name||3101||0%||0%||0%||0%|
|105||Condoms and contraceptives||4014||0%||0%||0%||0%|
|106||Firewood or fuel wood||4401||0%||0%||0%||0%|
|107||Wood charcoal (including shell or nut charcoal), whether or not agglomerated||4402||0%||0%||0%||0%|
|108||Government, Postal items, like envelope, Post card etc., sold by Government, rupee notes when sold to the Reserve Bank of India & Cheques, lose or in book form[4802,4817]||4802||0%||0%||0%||0%|
|109||Printed books, including Braille books||4901||0%||0%||0%||0%|
|110||Newspapers, journals and periodicals, whether or not illustrated or containing advertising material||4902||0%||0%||0%||0%|
|111||Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed||4905||0%||0%||0%||0%|
|112||Earthern pot and clay lamps||6912||0%||0%||0%||0%|
|113||Bangles (except those made from precious metals)||7018||0%||0%||0%||0%|
|114||Hand tools, the following: spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry||8201||0%||0%||0%||0%|
|115||Agricultural implements manually operated or animal driven||8201||0%||0%||0%||0%|
|116||PARTS OF GOODS OF HEADING 8801||8803||0%||0%||0%||0%|
|118||Slate pencils  and chalk sticks.||9609||0%||0%||0%||0%|
After the enactment of Constitutional (101st Amendment ) Act, 2016, the hope for advent of Goods and Service Tax (“GST”) in India is no distant dream. GST Council has also been notified on September 15, 2016 and thus, the policy formulators have taken their positions as part of this Think-tank and shall be responsible for taking the biggest fiscal decisions of the Country. The initial decisions would include formulation of Model GST law, rates as shall be applicable to different goods / services, determination of exemption to goods and / or services, Rules and processes etc.
Having said the same, this main body requires a lot of homework by each of its constituents. Since the body has become a single place for determining almost everything in relation to taxing supply of goods and services in the Country, each of its constituent would now have to understand the impact of every decision of the GST Council on its own subjects, impact on its treasury from such decisions, its relationships with its fellow states and also the movement of business into and out of its states. All these decision would change the way Governments have till now visualized their indirect policy and the way they shall be doing the same in the new era. Also, the focus of demands of the industry might also shift from state specific requests to request to GST Council. At this stage it is pertinent to mention that while the focus of each state should be meet its local interest, however, for the success of GST in India, the aim should be national interest.
Thus, to achieve the above objective, every stakeholder, including government of all states, Central Government and Union territories with legislature would be required to formulate certain bodies and undertake certain works, some of which are proposed in this article:
Restructuring their administration cadre: GST enactment would not be a big change only for tax payer but also the tax administration. The way taxes were imposed and collected would see a drastic shift and thus, the restructuring of tax administration at all levels is inevitable. The jurisdictions and subjects shall change, thus requiring the entire administration cadre to be restructured. The change becomes more difficult when we speak about a country like India having varied demographic and cultural profiles.
Forming their own internal think tanks: Though every government would be part of the larger think tank – the GST Council, to support their representation in the GST Council they would require a team of experts and administrators who can present their requirement to the representative and also are capable of assessing the impact of policy decisions proposed or taken in such GST Council. The experts would come from different walks of trade including representatives of trade bodies/ associations, Accounting professionals, representatives of consumer bodies, economists, Information technology experts etc.
Reworking their tax administration system: Increasing tax base is always the focus of every government as it denotes both prosperity amongst citizens and more revenue for government. The manner of increasing tax base would altogether change in the new regime and the government would be required to learn new manner of administering their subjects – through electronic systems. The new regime would be dependent on robust IT systems and also a team of techno-administrators who could analyse the huge data as shall be supplied by the taxpayers through electronic interface of GST Network (GSTN). The IT infrastructure, interface with tax payers and analysis interface with departmental officers shall determine the fate of ease with which collections would be maximized in a proper manner by the respective governments.
Training for the new era: Even though the entire infrastructure and interface be placed, desired results cannot be achieved unless the entire team of officers who shall administer the tax payer in the coming times are trained in a proper and systematic manner so that when the data of the tax payers is put before them, the same can be
Approachable approach: Apart from a lenient view, the addressal of the problems of the taxpayer be handled through a matured system of online and call centres wherein a taxpayer without being asked to disclose his identification can share his problem and can get an answer and sooner we may find a compliant tax base with lesser tax shortfalls. The model need to be replicated in physical mode in form of help-desks at the government offices to address problems of small tax payers as well who are not much acquainted with technology.
Government should also ensure that GST provisions are made available in form of small booklets and mobile app in regional languages. Even important decisions impacting common tax payers should also be communicated in regional language to ensure effective communication with all stakeholders.
A soft approach: The initial phase of the implementation shall have teething problem for both tax payer and administration. While the focus on part of government shall be to properly capture its tax base as well as their transactions, the trouble is no less for taxpayer as he also shall be facing a lot issues in terms of understanding the new law, upgrading his IT infrastructure to meet the requisites of compliance, training his team etc. These changes may result in errors and omissions on part of the subjects. Though intentional evasions can never be ruled out but it is also to be believed that most of the taxpayers are not evaders and thus, an initial moratorium be allowed to all at-least for six months where when pointed out, and when tax and interest is paid by the tax payer, penalty proceedings should not be initiated against them.
Check on rise in commodity pricing: A basic fear which has grasped the minds of the citizens before the advent of GST is the rise in prices of basic commodities. Thus, it becomes imperative on part of both Central and State governments to ensure check on commodity prices, particularly food items and medicines and if need be to take counter measures like maintaining stock and ensuring their availability through mass distribution mechanism.
Though each stakeholder might have hundreds of idea to make this proposed legislature better, however, the need of the hour is to provide ideas to make it a success. Though each of the stakeholders is important, however, being the biggest stakeholder, government need to play the most important part to support all its subjects during this most challenging transformation of Indian Indirect taxation.