GST - All you want to Know About GST?

1. What is GST?
GST is a comprehensive tax that will be levied on manufacture, sale and consumption of goods
and services at a national level under which no distinction is made between goods and services for
levying of taxes. If you were paying VAT on the goods being sold, then that tax will be replaced
by GST.
It would be a dual GST with the Center and States simultaneously levying it on a common tax
base. Thus, every supply of goods/services will attract:
a) Central GST (to be imposed by the Central Government) and State GST (to be imposed by
the State Government) in case of an intrastate sale; and
b) Integrated GST (imposed by the Central Government) being payable by the seller/ supplier
on inter-state supply.

2. Does GST apply to me?
Yes. Any individual registered under any of the following acts will be affected by GST:
a. Service Tax
b. State Sales Tax or VAT (except exclusive liquor dealers if registered under VAT)
c. Entry Tax
d. Luxury Tax
e. Entertainment Tax (except levied by the local bodies)

3. What are the taxes being subsumed under GST?
GST is expected to simplify and rationalize the current indirect tax regime and accordingly taxes
such as Central Excise duty, Additional Excise duty, Service tax, Additional Customs duty,
Special Additional duty, Central Sales tax, Value Added tax, Entry tax, Purchase tax, Luxury tax,
Local Body Tax and Octroi will be subsumed in GST.

4. What are benefits to a trader under GST?
Several indirect taxes will be subsumed under GST regime. In other words, instead of all such
taxes, the seller/ supplier shall be required to pay GST on the supplies/sales effected by them.
Additionally, the following taxes which are currently accounted as costs by the sellers/ suppliers
would be eligible as credit under GST regime:
a) CST paid on procurement of goods,
b) Excise duty / CVD paid on procurement of goods,
c) Additional Customs duty, special additional duty on import of goods,
d) Service tax paid on input services.
Accordingly, the service tax which is charged by Voonik on the commission paid by the sellers/
suppliers is presently not eligible as credit in the hands of sellers/ suppliers for set off against
VAT/CST liability. However, under GST regime the GST charged by Voonik on the commission
charged to the sellers/ suppliers would be eligible as credit for set off against output GST liability.

5. What documents do I need for GST enrollment?
You need the following documents/information for GST enrolment.
a) Provisional ID received from state or central authorities (used for VAT).
b) Password received from the state or central commercial tax authorities.
c) Valid e-mail address and mobile number.
d) Bank account number.
e) IFSC documents.
f) Proof of business (can be partnership deed, certificate of incorporation, registration
certificate of the business entity) in PDF or JPEG format.
g) Photograph of the promoters or partners of ‘karta’ in the case of HUF.
h) Proof of appointment and photograph of the authorized signatories.
i) Opening page of the bank passbook or a statement which shows bank account number,
including bank name, branch name, address, and few transaction details.

6. If I have multiple business verticals in a state, can I obtain different registrations?
Yes, if you have multiple business verticals in a state, you may acquire a separate registration for
each business vertical, subject to conditions as prescribed in sub-section (2) of Section 19.

7. Migration of registration of existing taxpayers under GST
Existing registered sellers/ suppliers (under VAT/CST) need not apply afresh for GST
registration. Such sellers/ suppliers would be migrated into GST and given provisional
registration. Such persons would be required to submit all requisite documents and
information for obtaining the final registration certificate within six months of granting of
provisional registration. Failure to do so will result in cancellation of GSTIN.
Accordingly, all existing tax payers are required to enroll on the GST system portal i.e.,
www.gstn.org for validating the data pertaining to such tax payer under GST regime.
Enrolment process under the GST would be common for all the Center / State / UT
registered taxpayers. Additionally, enrolment under GST to be common for both Central
GST and State GST.

VAT/Central Excise registered taxable persons should refer to VAT registration certificate or
Central excise registration certificate for state and central jurisdiction respectively.
Person who are not registered centrally in the current regime should refer to www.cbec.gov.in
for central jurisdiction based on their Principal place of business.
Please note that following documents are mandatory to enroll on to the GST Portal:
a) Provisional ID received from State / Central Authorities (generated while registering at GST
portal.
b) Password received from State/ Central Authorities.
c) Valid e-mail address
d) Bank account number and Bank IFSC number.

8. What types of taxes do I have to pay under GST?
For intrastate supply of goods and services, you would have to pay Central GST (CGST) and
State GST (SGST). For inter-state supply of goods and services, you would pay Integrated GST
(IGST). In addition, certain categories of registered persons will be required to pay tax deducted
at source (TDS) and tax collected at source (TCS) to the government account.

9. When does a taxable person pay GST?
At the time of supply of goods and services during one of the three events – on receiving payment,
issuance of invoice or completion of supply.

10. Where is GST required to be paid on supply /sale of goods?
GST on supply/sale of goods has to be paid to the State where the registration has been sought by
the seller. For instance, if a seller sells the goods from his registered warehouse in Maharashtra to
customer located in Madhya Pradesh, then such a seller is required to pay GST (IGST) given that the
instant transaction is an inter-state transaction in the State of Maharashtra, where the seller is registered.
Every taxable person shall have an electronic tax liability ledger, electronic credit ledger and electronic cash ledger tagged to each of his registration.

11. What is HSN code?
HSN code is widely used in many countries for the classification of goods for taxation, claiming
benefits, etc. HSN code for each commodity is identical in most countries. In some countries, it
may vary slightly based on the nature of classification of goods.

12. How is HSN code relevant to GST?
Under the GST regime, all goods will be classified on the basis of the HSN code. Currently, HSN
code is primarily used for classifying goods to compute value added tax (VAT) in India. Hence,
when preparing tax invoice for GST, you will be required to mention HSN code on the GST
invoice.

13. What is the format of HSN code?
HSN code can be a two-digit, four-digit, six-digit or eight-digit numeral. There are around 21
classifications of HSN codes, which are further sub-classified into 99 chapters of HSN codes.

14. Will I be able to select the HSN code while listing a product and/or change the mapping of
existing products?
Seller has to update HSN, uploading of category wise HSN is mandatory. Based on which your
listed product's TCS will be calculated. Remember, it is sellers’ liability to fill accurate HSNs.

15. How will goods and services be classified under GST regime?

HSN code shall be used for classifying goods under GST regime. Taxpayers whose turnover is
between Rs.1.5 crores and Rs.5 crores shall use a two-digit HSN code, while taxpayers whose
turnover is Rs.5 crores and above shall use a four-digit code. Taxpayers with turnover below
Rs.1.5 crores will not be required to mention HSN code on their GST invoices. Services shall be
defined as per the services accounting code (SAC).

16. What is SAC?
The SAC has not been declared in the Model GST Law, but it will remain the same as the current
code system used for service tax.

17. What is input tax credit?
As you know, GST is a dual-concept system. On every transaction within a state, there will be
components of Central GST (CGST) and State GST (SGST). For inter-state transactions,
Integrated GST (IGST) will be applicable. Therefore, you should know how to offset input credit
against each of these components as prescribed by the Model GST Law. Here, input tax credit
refers to goods and services tax paid or payable by a registered user on the purchases or expenses
incurred for business activities. Tax liability refers to the amount a user legally owes a taxing
authority.

18. Requirement of invoicing under GST
Every sale of goods under GST shall have a valid invoice with the relevant details as mentioned
below:
a) Name, address and GSTIN of the seller/ supplier.
b) Date of issue.
c) Consecutive serial number of invoices.
d) HSN code of the goods sold.
e) Place where the goods are sold along with the name of state (in case of inter-state sale of goods).
As mentioned above, taxes under GST flow to the destination state where the movement of goods
terminate, the invoices raised by the sellers/ suppliers should have a mention of the details of the state where the goods are delivered. For instance, as mentioned in the above illustration, the seller at the time of raising invoice for supply of goods should mention the name of state where such goods are soldfrom ie, Madhya Pradesh
Additionally, it is pertinent to note that the goods when stock transferred from one warehouse of a
particular state to warehouse of another state shall be regarded as supply under GST attracting IGST.
Accordingly, the detailed invoice should be raised for such stock transfers.

19. Are there any criteria to claim input tax credit?
Yes. They are listed below:
a) You must be a registered user on GST.
b) The goods or services must be acquired in the course of or furtherance of business; ITC is
claimable on acquisition of capital assets used in the business (such as equipment, furniture,
etc.)
c) Goods or services are acquired for making taxable supplies; GST is charged with a standard
rate or zero-rated supplies.
d) It must not be subject to any restriction such as blocked input tax items.
e) You must hold valid tax invoice or valid customs importation documents.
f) Tax invoices must be in the name of the registered person unless simplified tax invoices are
used