A Complete Guide To Understand How GST Works
GST will not cut down the tax you pay for your Mcdonald’s meal but will make your bill look tidier. So, unlike before, now, when your family visits a theater, you will get a concrete bill with GST instead of entertainment tax, service tax, VAT, or cesses. Interesting right? Learn more about GST with this complete guide to understand How GST works.
What is GST?
GST is a comprehensive indirect tax levy on manufacturing, sale, and consumption of goods and services at the national level. Before moving ahead with how GST works, let’s understand a brief of what taxes are.
Know more about GST in this comprehensive Guide to Goods and Services Tax
What are Taxes?
Taxes are the obligatory contribution to the State Revenue. The Government of India levies taxes on the citizens’ income to enhance the country’s economy and escalate the standard of living of the nationals.
Understand the difference between the old Tax Regime and GST
To get a more profound knowledge of How GST works, let’s first understand the difference between our old tax regime and the GST. GST incorporates all the indirect taxes. Thus, the question arises, what are those indirect taxes? Let’s find out!
There are two types of taxes that government collects on a broad spectrum – Direct tax & indirect tax.
Direct Taxes: Direct taxes are the taxes that we pay directly to the government, like the cringed income tax, corporate tax, wealth tax, etc.
Indirect Taxes: There are taxes that we pay indirectly on purchased goods. There were 17 different indirect taxes, including Excise Duty, Service Tax, Customs Duty, Entertainment Tax, Sales Tax, Value added tax, etc.
You may want to know about the Top 10 Online GST Courses in India
Introduced on the 1st of July 2017 in India, GST replaced all indirect taxes levied on goods and services. Its ultimate aim was to remove taxation barriers between states and provide a single free market for all to buy and sell, import, and export within the country.
Internationally, GST was first introduced in France and gradually accepted in more than 160 countries across the world. Countries depending on their socio-economic structure have launched National level or Dual GST. The National GST cannot be implemented on States without losing their fiscal autonomy. In contrast, Dual GST is levied on both the Central and State government.
Now, this new GST regime has also helped to eliminate the cascading effect. Assume your best Sandwich Shop gets its bread from a local supermarket in Ahemdabad. This supermarket sources the bread from Udaipur, ordering the Wholewheat (Aattaa) in bulk from Uttar Pradesh. So, a 10-kg sack of wheat costs the manufacturer Rs—100 at the farmer’s mill, which suffers a Central Sales Tax when shipped to Udaipur. While selling the bread to a supermarket in Ahmedabad, the manufacturer must pay Central Sales Tax once again. By the time your Sandwich shop buys the bread, VAT also gets added to his bill. With each of these intermediaries, the cost of bread increases, contributing to a pricey sandwich.
The beauty of GST is that it will allow your favorite Sandwich shop, supermarket, and farmers to claim the input tax credit against all the taxes that they have paid. It will prevent the suppliers from paying the insidious tax on tax.
Find out the Top 10 GST Certification Courses in Bangalore
Determining One Nation, One Tax
GST is perceived as a single tax mechanism or widely recognized as one nation, one tax. But India follows Dual GST, considering Central GST (CGST) and State GST (SGST) and Integrated GST (IGST) applicable in case of inter-state supply transaction.
For example, If you go to your nearby local store in Pune and buy a cooking oil manufactured in Mumbai, you will be charged CGST & SGST both. Similarly, if you purchase an oil jar manufactured in Delhi, you will be charged IGST.
Further to your understanding of how GST works, we need to determine different slabs of GST. The GST is levied at multiple rates ranging from 0 percent to 28 percent. Indian GST council had finalized a four-tier GST tax structure of 5 percent, 12 percent, 18 percent, and 28 percent, respectively. A lower percentage of taxes are levied on essential goods, while luxury goods and de-merit or ‘sin’ goods attract an additional cess. Service taxes vary between 15% – 18% GST or even lower, depending on their abatement provision. For example, 5% GST is levied on train tickets.
If you are a newbie, check out the Top 8 GST Certification Courses for Beginners
So, imagine you’re going to a local grocery store to buy cooking oil and other essentials; your final bill will now include 5% GST inclusive of your Value Added Tax (VAT) and other indirect taxes. Once you finish shopping, you plan to book an Uber ride to reach home. Your Uber service will further add 5% GST excluding the extra 6% Service Tax that you were paying earlier before GST was implemented.
However, if we look at the brighter side, GST saves quite a bit on different goods and services like cars or movie tickets that suffered multiple indirect taxes during the old tax regime. In addition, to understand how GST works, it is also essential to know who is eligible to charge GST and how one can register for it.
Who are eligible to charge GST?
You must be wondering if every goods & service provider can charge GST? Or if your housemaid, or the local plumber who fixes your bathroom’s faucet, or the rickshaw driver can charge GST against their services? The answer is No; not everybody providing goods and services is eligible to charge GST.
The government sets an eligibility criterion, where one has to register following the minimum required standards. For example, small businesses can voluntarily register if they have 20 Lakh or less turnover per year. The businesses with a minimum turnover of 20 lakh or more per annum are entitled to apply for GST registration.
In other cases, GST is mandatory (irrespective of turnover) for some businesses-
- Who makes the inter-state supply of goods and services,
- The casual taxable person who has no fixed place of business?
- Any non-resident taxable person who supplies goods and services in India.
- A person who delivers goods & services from an online platform.
- Person supplying online information and retrieval services from outside India to a person in India.
GST Registration Forms and Process
The Ministry of Finance (MoF) has made the GST registration process very efficient through the online GST portal. Post submission of the GST application form, the portal generates GST ARN immediately. The applicant checks their application status by using that GST ARN. The taxpayer shall receive a GST registration certificate and GSTIN within 7 days of ARN generation.
There are mainly two types of forms that need to be filled by the applicant. These are GSTR-1 and GSTR-3B. In simple words, in GSTR-1 form, the taxpayer will enclose their business details – Business type and income. While GSTR-3B includes taxes, a businessman collects from its consumer + the taxes they pay to their wholesaler/manufacturer.
GST Certification Course for a thorough understanding and Career Growth
I wish GST would be this simple! But the above understanding of how GST works is not enough for one looking for career growth in this field. For them, a GST Certification Course is highly recommended. Thus, the last but the best way to understand How GST works is to get a thorough knowledge of GST by doing a Certification course.
GST certification course can be taken by any graduates, CAs, financial and taxational professionals, company secretaries, or anyone who wants to establish a career in this field. It will increase more job opportunities, salaries and develop skills. This course will not only explain how GST works but will also help your businesses by enhancing your knowledge regarding the Goods and Services Tax. This course will improve your problem-solving and analytical skills to boost decision-making with the specialized, updated knowledge required for self-employment and employment in the industry.
Several good institutes are offering GST Certification incorporating a thorough understanding of How GST works.
1. IIM Skills
IIM Skills, the top-notch ed-tech institution offers four weeks of live online GST Certification training packed with practical assignments, free e-books, invoicing tools, and software. It will allow you to gain an overall understanding of Goods and Service Tax (GST), its inceptions, compliances, implementations & enforcements. This course emphasizes learning the finer points of how GST works.
After completing this course, you will receive a certificate, lifetime access to the sessions, career guidance, and 24*7 support with the faculty and GST professionals. This is not it! You will become job-ready acquiring a practical in-depth knowledge of how GST works and all other processes under GST, be it the registration, TDS compliances, tax returns, refunds.
These are the following modules covered in this GST Certification Course:
- Overview of GST
- Understanding the Different Tools, And Software
- Conditions For claiming ITC
- Reverse Charge Mechanism
- Payment under GST Act
- Registration Process and Criteria under GST Act
- Invoicing Rules, Regulations
- GST Returns
- Benefits of GST
- Terms and conditions for GST
- e-way Bill, and Many Others.
Additional Benefits –
These are the following benefits of the GST Certification Course.
- Overall understanding of GST- implementation & Enforcement
- Live Interaction and hands-on training on GST
- Well researched teaching methodologies
- Up-to-date curriculum
- Immersive learning with the leading industry experts
- Become job-ready with expert knowledge of GST
IIM Skills GST certification course will clarify how GST works and helps you to become an expert GST Practitioner. You will also get to interact with the experts for all your doubts.
You can also read IIM Skills GST Course Review in detail for your reference.
2. MSME (Micro, Small and Medium Enterprises) GST Certification Course
Indian Institute of Micro, Small, and Medium Enterprises offers top valued Certifications, which will make your resume more valuable. Its targeted audiences are Entrepreneurs, managerial personnel, working Professionals, Tax Consultants, educators, and Students.
Capacity building services
Skills up-gradation services
Provide Job opportunities by facilitating training programs
Provide training in the field of entrepreneurship
These are the following concepts explained under the GST that will be covered in this.
GST Time of Supply
GST Place of Supply
Input Tax Credit
GST Advance Ruling
GST Customs Duty
GST Moot Court
GST Ethical Practice
These are the following benefits of the GST Certification Course.
Understand the issues related to the transition of the present tax structure to the GST regime.
The number of job opportunities will increase.
It will enable an individual to start their own consultancy.
It will help to develop the skills of different taxation, finance, and accounting.
It offers a classroom environment with structured and up-to-date course content.
Contact Number: 040-23633220
3.Henry Harvin GST Certification Course
Henry Harvin is one of the top institutes providing online GST certification courses. It gives a 360-degree insight into how GST works and GST regulations.
This certification course includes 32hours of live online sessions and hands-on projects in GSTR 3B, GSTR 1, GSTR 2A, and more. It also provides Internship assistance along with GST Practitioner Certificate once you complete the course.
This GST Certification Course has 4 modules covering the following topics.
Taxable Event Supply
Taxable Events Supply
Place of Supply
Way Bill in GST
Input Tax Credit
Transitional Provisions & Misc. Provisions
Job work under GST
Invoice Account & Records
Time of Supply
Refund of GST Paid
Return Under GST
Annual Return & Annual Audit in GST
Appellate level in GST
Advance Ruling & Appellate Authority
Offenses, Penalties, & Prosecution in GST and Power to Arrest
Special Topics – Litigation Management, Audit and Assessments, Demand and Recovery, Exemptions
Critical analysis of GST Law
Real-time application of the complicated GST provisions
Get certified GST Practitioner Certification
100% placement support
Get 1-year access to their e-Learning portal
Get trained from the experts with 20+ years of experience
Contact Number: 9015266266
Don’t forget to read about other free GST certification courses online.
GST has become an essential part of our daily life, yet many of us are unaware of the process of how GST works. Understanding GST is not only crucial for banking and finance people but also imperative to the common public, who spend a significant part of their income on taxes.
Learning about GST can help us become conscious of our daily budget and also provide several career opportunities. People seeking jobs in this field should take a certification course in GST from a recognized institution. I have recommended the top 3 institutes above in this article for your reference. However, I would suggest IIM Skills as it fits all standards of providing a thorough knowledge of GST with practical assignments and lifetime support.