Earlier, there were multiple taxes levied both at the central and the State level which often confused the taxpayers.
India's gross GST revenues was the highest-ever in April at ?1,87,035 crore. It is 12% higher than the same month last year, which was the previous highest tax tally of ?1.67 lakh crore.
Let us know more about GST that simplified our tax regime.
The concept of GST was introduced in the Budget speech on February 28, 2006. Though initially it was proposed that GST would be introduced on April 1, 2010, GST was introduced on July 1, 2017, under the 'one nation, one tax initiative. Its aim was to bring different types of taxes under a single-tax system.
To implement GST, Constitutional (122nd Amendment) Bill was passed by Rajya Sabha on August 3, 2016. The Prime Minister Narendra Modi-led Cabinet approved setting up of GST Council on September 12, 2016. The 49th GST Council meeting took place on February 18, 2023 in New Delhi.
What is GST?
The Goods and Services Tax (GST) is levied on the supply of goods and services, which is paid by the consumer. It is imposed in the State where the goods and services are consumed and not where they are manufactured.
However, some goods and services are exempted from GST and are subjected to a State's existing taxes such as the Value Added Tax (VAT), which is paid at every stage of value addition in the supply chain. These levies are paid at each stage of the production process by the consumer.
As the GST is a destination-based tax there are various types of GST-CGST (levied by the Centre), SGST (levied by the State), UTGST (by the Union Territory), and IGST (levied for the interstate supply of goods by the Centre).
Earlier, there were multiple taxes levied both at the central and the state level which often confused the taxpayers. The introduction of GST has eased the manufacturer's job of compiling different taxes into one. Besides, it has brought India at par with the global market by following a universally accepted tax regime. With the implementation of IGST, the manufacturers no longer have to pay CST (Central Sales Tax) and other taxes.
Difference between GSTN and GSTIN
GSTN (Goods and Services Tax Network) is a platform that manages the IT system of the GST portal. It is used by the government to track financial transactions and other tax informations. Meanwhile, GSTIN is a 15-digit tax registration number that is provided to manufacturers, traders, stockists, wholesalers, and retailers.
FORMAT OF GSTIN
*First two digits of GSTIN is the State code
*The next 10 digits denote the PAN or Permanent Account Number of business entity/proprietor
The 13th digit is based on the number of registrations done by the business entity within a State
*14th digit is "Z" by default
The last digit is the check code, which can be a number or a letter.
Picture Credit : Google