What Are The Features Of GST?
The Goods and Services Tax (GST) is a statewide indirect tax paid on businesses to create a unified market in India. A single tax is levied on goods and services throughout their entire cycle. GST is classified into three types: central GST (CGST), state GST (SGST), and integrated GST (IGST).
1)Single Indirect Tax
GST is a consolidated tax, meaning you no longer have to pay many other taxes, such as VAT, excise duty, service tax, etc. This unification has simplified business tax compliance while lowering the cost of various goods and services.
The GST system levies a single tax rate on products and services based on their Harmonised System of Nomenclature (HSN) categorization. The GST rate varies based on the type of goods or services. Enrol now at the GST Training in Bangalore.
2)Registration Exemption In Small Businesses
Every firm with a total turnover of more than Rs.40 lakhs in a fiscal year is required to register for GST. The maximum for particular category states and Telangana is Rs 20 lakhs. The GST threshold limits for service providers are Rs.20 lakh and Rs.10 lakh for regular and special category states, respectively. Small enterprises not exceeding the threshold restrictions are exempt from registering for GST and collecting and paying taxes.
3)GST Composition Scheme
The GST composition system allows qualifying firms to pay less GST on their taxable turnover. It also minimizes the number of regulations that a company must follow.
Manufacturers with a turnover of up to Rs 1.5 crore can participate in the composition scheme. This maximum is Rs.75 lakhs in the North-Eastern states and Himachal Pradesh. A specific composition scheme is also available for service companies with a turnover of Rs.50 lakhs. However, as mentioned in the following pointer, a business paying tax under the composition method cannot claim the input tax credit.
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4)Consumption-Based Tax
GST is a consumption tax levied at the point of origin. The GST collected on goods and services is received by the state where the supplies are consumed, not the state where the supplies are manufactured. And, while GST is payable at each stage, the supplier of the products or services balances this GST by claiming the input tax credit for GST paid at prior stages. Finally, the final dealer passes the GST to the final consumer of the products or services. Also, check the Training Institute in Bangalore.
5)Competitive Advantage
Eliminating the cascading impact and implementing ITC have assisted Indian enterprises in lowering their compliance and production costs. This has provided Indian enterprises with an international competitive advantage, making them more appealing to overseas customers and investors.
Thus the features of GST are single indirect tax, registration exemption in small businesses, GST composition scheme, consumption-based tax and competitive advantages. To know more about the GST, join GST Training In Chennai at FITA Academy.