Understand GST for Business : GST Taxation Factors

GST, such a sweet-sounding abbreviation but apparently it’s a heap of complication and amendments. It’s already more than two and a half years since the enactment of Good and service tax (GST). But still people find it difficult to incorporate there business according to GST. I very often get questions like “what is GST”, “What is CGST, SGCT, IGST” and “how to accommodate our business according to GST” etc. And almost everybody understands it, credit goes to media but as knowledge is of the surface facts they get confused.  

With this blog I’am going to start explaining the fundamental of GST. Which will make the reader to understand GST and all it application related fundamentals very easily with law based facts. I would be writing in series many blogs to link and build a chain of clarity. This will guide one to operate business with more clarity. Here I’am not trying to portray the history and incarnation of GST as you can get it very easily anywhere. Here I’am to provide practical edge to reader nothing else, in precise manner.

GST and Taxation Factors

GST stands for Goods and Service Tax. It is a destination based tax which means that tax is charged based on the place of supply of goods and services. Ones you are liable for GST registration or have taken it, you need to think with prospective of GST taxation factors.  So the chargeability/levy of GST arises when there is “Supply of Goods and Services”. The liability to pay GST arises at the “Time of Supply”. The tax to be charged based on where the “Place of Supply” is, like Inter-state, Intra-state etc. Many a times the place of supply is the “Location of Supplier”. The tax is charged over the “Value of Taxable Supply”. “Reporting” of supply made or received is done on regular intervals in the form of “Returns”. If one has an understanding of each of the above high-lighted phenomenon then they can enjoy an ease in operating there businesses under GST regime. 

GST Taxation Factor

GST TAXATION FACTORS

1. Registration - with the registration under GST the liability for the GST Compliance evokes. The registration can be voluntary, required or compulsory. One must be really aware of the limit which make them liable to get GST Registration.Just after getting registration whether the business is running or not, one is bound to do certain formalities like return filing on regular intervals.  We are going to discuss registration requirements under GST in detail in a separate blog, the link is https://taxolawgywithpriyankatiwari.blogspot.com/search/label/GST%20Registration

2.   Supply – Supply in layman sense is simply sale or transfer for a consideration. GST is charged on supply of good and services. But supply under GST has a far wider scope. Many a time the transaction without consideration are also considered as supply. All these facts are further explained in detail in another blog and the link is https://taxolawgywithpriyankatiwari.blogspot.com/2020/03/scope-of-supply-under-gst.html

3.  Time of Supply – Time of supply means the point of time when the goods are considered to be supplied or services are considered to be provided. Levy of GST and liability to pay GST arises at the point of supply. Time of supply of goods and time of supply of services are explained separately in the Act. This we will be discussing in a separate blog.

4. Place of supply – Place of supply helps to find out that the transaction is Interstate on Intrastate. This defining of Interstate or Intrastate helps to define the charging of CGST (Central Goods and Service Tax), SGST (State Goods and Service Tax) or IGST (Integrated Goods and Service Tax). Many a time place of supplier or other places are taken as place of supply due to the facts of the transaction as per Act.

5.  Valuation – Valuation means Valuing of Taxable Supply. This defines how the consideration for a transaction is to be calculated. It States what is to be included in the consideration and what to be excluded. There are valuation rules as well to calculate value in special circumstances.

6.    Reporting – Under GST reporting plays a very significant role. Reporting is done in the form of returns. Like currently returns for business are filled in GSTR 1 AND GSTR 3B. GSTR 1 is filled on monthly bases for persons having aggregate turnover more than ₹ 1,50,00,000 (Rupees one crore fifty lakhs) and for others it’s on monthly bases. GSTR 3B is to be filled on monthly bases. Returns are to be filled in regular intervals to ensure proper compliance, and non compliance shall attract huge penalties and other severe punishments.

      By considering the GST taxation factors one can operate their business effectively under GST Regime without much difficulty. With this blog I have tried to provide you the practical knowledge to operate your business effectively. I hope this blog has provided useful detailed to you. If you find this blog useful please do share with your friends and family. Feel free to leave your views, comments and queries in the comment section below.

Disclaimer :

The above blog is purely for educational and  guidance purpose. It's just the reflection of the author's personal experience and judgment. The author has just provided the general information & understanding and its not at all an alternative of any legal advice or practitioner. It has no connection with the websites mentioned in its contents. The content stated in the blog should be used by the reader at his own discretion and sole responsibility. The content of the blog can be only used for any other document, write-up, article, blog and any written or printed material whether on paper or digitally in any form, with the prior permission of the author.