The Goods and Services Tax (GST) is the biggest reform in India’s indirect tax structure. It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as set off. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.
How will GST help the Trading Community?
Under GST, a trader would be entitled to avail input tax credit paid on his domestic procurement of goods and services unlike the present indirect tax regime. Presently, a significant portion of indirect taxes namely Central Excise and Service Tax form part of the cost component for a trader. This will not be the case under GST. He will now be able to take credit of all taxes paid by him.
In respect of imports, the landed cost is expected to reduce significantly under GST. Hence, the traders will gain significantly in terms of input tax credit on their operating expenses thereby decreasing their operating costs.
CST which was non-creditable has been subsumed in GST. This will be a huge benefit for the traders. Entry tax has also been subsumed in GST. Removal of CST and entry tax shall immensely benefit the traders. Traders will be able to sell their goods to farthest areas.
Is it compulsory for all the traders to register under GST?
A trader dealing only in exempted goods or where his turnover is below Rs 20 lakh in the financial year (but not engaged in inter-State supplies) is not required to register under GST.
Do traders who are not opting to pay tax under the composition scheme required to file monthly return?
Traders not opting to pay tax under composition scheme need to file return on a monthly basis. Form GSTR-1 is to be filled for upward supplies made by the trader (Made in the month for which return is being filed) by the 10th of the next month. Other parts of the return Form GSTR-2 and Form GSTR-3 are auto-populated and inly needs to be verified and submitted by the 15th and the 20th of the next month respectively.
What information do the trader need while filling GSTR-1?
The details to be entered in the return of outward supplies Form GSTR-1, made by the trader depend upon the nature of supplies made. The provisions are as follows:
1. Intra-Stae supplies to consumers (B2C supplies)- tax rate wide summar;
2. Inter-State supplies to consumers (B2C supplies) of value up to Rs 2.5 lakh- State-wise and tax-rate wise summary,
3. Inter-State supplies to consumers (B2C supplies) of value above Rs 2.5 lakh- specified invoice wise details,
4. Supplies to re sellers (B2B)- specified invoice-wise details.
Are traders required to declare their IEC at the time of imports and exports, under GST?
For the time being, both GSTIN and IEC have to be declared, But over a period of time, traders need to declare only their HSTIN instead of IEC at the time of imports and exports.
Can traders get the credit of IGST paid at the time of imports for discharging their domestic liabilities under GST? If yes, how?
Yes. Under GST, traders will be on par with manufacturers. IGST paid at the time of import will be available as credit which can be used for payment of taxes on further supplies. GSTIN would be used for the purpose of credit flow of IGST on import of goods and refund of IGST paid in case of export.
When will a trader have to pay tax?
A trader, if registered under GST, will have to oay tax on monthly basis on or before 20th of the succeeding month. A person who has opted for composition levy will have ti pay tax on quarterly basis on or before 18th of the month succeeding the quarter relating to supplies.
With inputs from http://www.cbec.gov.in/