Impact of GST on Export of Goods and Services

Impact of GST on Export of Goods and Services

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Company Registration

GST for export of goods and services in India is zero-rated. Zero-rated supply does not mean that the goods and services have a tax rate of ‘0 ’. It means that the recipient of the supply is entitled to pay ‘0%’ GST to the supplier of goods or services.

This blog will help you understand GST registration and compliances related issues if you are an exporter of goods or services. It is going to a simple blog for the most searched or most common question that every new exporter in India.

GST on the export of services from India

GST on the export of services from India

1. What is the export of services in the context of GST? 

Export of services mean a case where the place of supply of service is outside India and the person receiving services is outside India and the provider of services is located in India

2. Is GST registration required if I am an exporter of services?

Export of goods are considered as inter-state supply and under GST law, new GST registration becomes compulsory for any person who is doing the inter-state taxable supply of goods. Unlike in export of goods, Export of services cases is exempt from GST registration for a threshold limit of up to INR 20 Lakhs.

3. Do I need to pay GST while I sell services outside India?

 If you are registered under GST as an exporter of services, then you should know that since export is considered as interstate supply so you need to pay IGST in case of export of services. However, the amount of I GST paid in case of export of services can be claimed as refund by the exporter by following a certain procedure as prescribed by the Government. Another alternative that an exporter of services has is that he can apply for a Letter of Undertaking (which is called LUT in short). By taking LUT an exporter of services can make the export without paying any IGST.

4. What is GST Registration procedure for exporter of services in India? Is GST registration online possible?  

There is the facility of GST registration online provided on the Government of India portal. https://www.gst.gov.in/

Other Blog : Annual Return under GST (Form GSTR-9)

One can collect the documents first then apply by following the instructions given on the website. Or one can approach service providers such as caonweb which are  India’s top GST registration service provider. Why take a risk when you have an affordable best quality service providers in the market. 

There is a chance that if you file it yourself you might get a notice from the GST department for any error you may make while filing the application of GST registration. Therefore another alternative of GST registration online is caonweb, India’s most trusted tax, and compliance service provider online. GST registration procedure is simple however it could be tricky based on the nature of business.

5. If I have not crossed the threshold limit but I took GST Registration as an exporter of services?

In this case, do I need to comply with GST return filing norms? Yes, once you take GST registration, filing becomes mandatory for you.

Accounting & Auditing Services

GST on exports of goods from India

1.What is export of goods in the context of GST?

Export of goods in simple terms means taking goods out of India to a place outside India. Export of goods is considered as inter-state supply and under GST law, GST registration becomes compulsory for any person who is doing the inter-state taxable supply of goods

2. Is GST registration required for export of goods?

Yes it is mandatory for you to take GST Registration if you are an exporter of goods. Irrespective of the limit of your turnover, it becomes mandatory to take new GST registration for an exporter of goods.

3. Do I need to pay GST while I sell goods outside India?

If you are registered under GST as exporter of goods, then you should know that since export is considered as interstate supply so you need to pay IGST in case of export of goods. However the amount of igst paid in case of export of goods can be claimed as refund by the exporter by following a certain procedure as prescribed by the Government. Another alternative that an exporter of goods has- that he can apply for a Letter of Undertaking (which is called LUT in short). By taking LUT an exporter of goods can make the export without paying any IGST.

Here are some common important points for both exporter of good and services

·      What are the important compliances to be kept in mind once my GST Registration procedure is completed? Once you obtain new GST registration, you will be assigned a number which is called GSTIN. Now you are registered under GST. GST return filing becomes mandatory for you.

·       What is the compliance of GST return filing in case of exporter of goods or services? GST return filing is mandatory even if you have to pay zero taxes or even if your business is not doing operation currently. Because once a person is registered under GST it becomes mandatory that such GST registered person files GST returns as per the prescribed due dates are given by the Government.

·       What are the consequences for late filing or return or no filing of return under GST for export of goods or services? You will have to pay interest and penalty for all these noncompliance’s. It is your tax consultants duty to ensure that your business is filing GST return before the due date and there is zero noncompliance from your side.

How to apply for LUT?

To apply for LUT online you need to login to your GST website. Here are the simple steps on how to file furnish LUT in GST. To apply LUT, here is what you need to follow:

·       Login to GST website of the Government

·       Click on User Service

·       Click on Furnish Letter of Undertaking (LUT)

·       Fill the form as per the instruction given

·       Submit with EVC or DSC

Is online GST return filing easy and can be self-filed?

Online GST return filing by yourself is the right thing to do only if you have technical knowledge on GST laws. Otherwise, you must go to a Chartered Accountant who can file your GST return in a correct manner.

GST registration in India

GST Department is getting stricter day by day!! Are you ready??

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Are you aware of the fact that GST department has already put up lenses to check flaws? There are so many businesses who register under GST but they do not file returns. Mostly people are not aware of the fact that even if you are not selling or you have no transactions in the business you still need to comply with the rule of filing GST returns.

Online Company Registration

Now GST department is keeping it strict and checking everything. Department is cancelling registration of those gst registered businesses who are failing to file returns. Also when you apply for GST, You have to make sure that the documents, your bank details everything needs to be as per department’s requirement.

So if you are all ready to start a business or are already doing a business make sure you have just the right knowledge of GST compliance. Else you might lose name or even clients in market. Get in touch with professionals who can guide you on gst correctly. A reliable person for gst compliance is Chartered Accountant so you need to find a consultant for that. A platform such as CAONWEB gives you the facility to connect with CA nearby you for all tax and compliance matter. Do not fall for the nonprofessional service providers who gives you or claims on the lowest price gst trend as a little flaw in compliance could cost you huge in the future.

Read this: Compliances Under GST for a Service Provider

GST is vast. As an owner of the business, you should be familiar with the basic things of GST. The technical part is taken care of by your tax consultant. However, it is good to have knowledge of at least basic terms. For those who are beginners and wants to know basic here it is:

Who needs GST registration in India?

If the turnover of your business exceeds specified limit, you are required to have GST registration on a mandatory basis.

If you are  selling  either product or services  E-commerce operators such as Amazon, Flipkart, You need GST registration on a mandatory basis. It does not matter how much turnover you have.

If you do not fall under the threshold limit and want to get GST registration, You can voluntarily do that.

How is payment of GST done?

20th of the next month is date to pay GST . Like for June-19 gst you need to pay it by 20th July 2019 through filing gstr 3B.Interest @ 18 for failure to pay before due date.

How is GST registration done?

If you have GST documents ready you could complete the process through Government’s website. https://www.gst.gov.in/

What is input tax credit under GST?

Input Tax Credit (ITC) is amount of tax that you pay while you purchase  tax already paid by a person at time  of purchase of product or services. Tax credit as the name suggests, you get to deduct this amount of tax from your tax liability. ITC avail facility is restricted. For certain product and services it is not allowed to take ITC. ITC

What are the compliances after I get registered under GST?

Once you are registered under GST, You need to comply with the GST return filing requirement. All the filing is done electronically through GST department’s portal. Professional help should be taken when you file the return. You can find CA nearby you in google.

GST REGISTRATION | GST RETURN FILING

What is composition scheme under GST?

The composition scheme simplifies the way you pay taxes and file returns. In India if you are in business of goods trading/manufacturing and if you have a restraint turnover of which is less than INR 1 crore you can take the composition scheme.

Under this scheme tax rate is not the normal GST rate. It is 1% (for trading/manufacturing of goods) or 5% (for restaurant). In composition scheme you cannot take input tax credit.

What is e-way bill?

E-way bill is compulsory to move goods from one place to another in a case where goods value exceeds INR 50000. E-way bill can be generated through. https://ewaybill.nic.in/

What is reverse charge mechanism?

Unlike in a normal way where person selling product or services collects and pay gst, under reverse charge mechanism person who purchase product or services is liable to collect and pay gst. Reverse charge is applicable of specific products or services as notified by the Government. The tax rate is same as applicable in regular gst transactions.

Compliances-Under-GST-for-a-Service-Provider

Compliances Under GST for a Service Provider

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What are GST Returns?

Return means a statement of facts filed by taxpayers to tax authorities at regular intervals (monthly, quarterly, yearly, etc.). Similarly, GST returns are nothing but the statement of facts in a statutory format which is to be submitted to tax authorities regarding supplies made, input tax credit claimed and taxes paid by the taxpayer.

GSt Registration online India

How GST returns are filed?

All the GST return filing processes are to be done electronically. The whole process of GST filing is online. Taxpayers can directly file gst return on the gst portal online. However, this may become time-consuming and tiresome with a huge number of invoices. For such cases, offline utilities have also been provided by the GSTIN (online common portal).

processes are to be done electronically. The whole process of GST filing is online. Taxpayers can directly file gst return on the gst portal online. However, this may become time-consuming and tiresome with a huge number of invoices. For such cases, offline utilities have also been provided by the GSTIN (online common portal).

What are the types of GST Returns?

Following are the various GST returns which are to be submitted by taxpayers

1.GSTR-1: Every taxpayer is required to furnish the details of outward supplies in form GSTR-1 except the following entities:-

a) Input service distributor (ISD)

b) Non-resident taxable person

c) Taxpayers who have opted for composition scheme

d) A supplier OIDAR services

e) Persons who are required to deduct tax deducted at source.

f) Persons who are required to collect tax collected at source.

  Due Dates for filing GSTR-1

TurnoverDue date
Taxpayers having a turnover more than INR 1.5 Crores.11th of the following month.
Taxpayers having a turnover less than INR 1.5 Crores.31st of next month from the end of the quarter.

2. GSTR-3B: Every registered person is required to furnish a monthly return in form GSTR-3B on or before the 20th of next month, except the following entities:-

a) Input service distributor (ISD)

b) Non-resident taxable person

c) Taxpayers who have opted for composition scheme

d) A supplier OIDAR services

e) Persons who are required to deduct tax deducted at source.

Accounting & Auditing Services

3.GSTR-4: Every registered taxpayer who has opted for composition scheme is required to file GSTR-4 on a quarterly basis on or before the 18th of the month of succeeding quarter.

4.GSTR-5: Registered non-taxable persons not having a business establishment in India and have come for a short period to make supplies are required to file monthly return in form of GSTR-5. They generally make imports and make local outward supplies. Due Date for filing GSTR-5 is 20th of next month.

5.  GSTR-6: Every Input service distributor is required to furnish details of input tax credit received and distributed by filing a monthly return in form of GSTR-6 on or before the 13th of the next month. ISD is not required to furnish details of outward supplies.

6.  GSTR-7: Entities who are required to deduct TDS under GST are liable to furnish GSTR-7. Following entities are required to deduct tax:

a) Central/State government department or establishment             

  b) A local authority                                                                            

      c) Government Agencies

GSTR-7 is required to be furnished on or before 10th of the next month in which tax was deducted.

7.  GSTR-8: Every taxpayer who owns or controls a digital platform for e-commerce and is required to collect TCS is liable to file GSTR-8. GSTR-8 is required to be furnished on or before 10th of the next month.

8.  GSTR-9: Every taxpayer registered under GST is required to file a GST annual return in the form of GSTR-9. It is required to be filed for every financial year on or before 31st December in the subsequent financial year. It is a consolidation of all the returns filed related to that financial year. CBIC has extended the date for the financial year 2017-18 to 30 June 2019

9.  GSTR-10: Every registered taxpayer whose registration has been canceled or surrendered is required to file a final return electronically on the common portal. It has to be filed within 3 months of the date of cancellation or date of the order of cancellation, whichever is later.

How to File GST Return Online-?

What is the Cost of GST Return Filing?

There is no fixed amount for the cost of GST return filing in India. It entirely depends upon a number of factors, important ones are mentioned below:

1.  Type of Scheme you have opted for (regular/composition scheme).

2.  Number of transaction of outward supplies per month.

3.  Brand value of that particular consultancy firm.

4.  Type of entity.

5. Annual Turnover of the entity.

Some consultants charge heavy amounts for all these compliances but one should always weigh his or her option before opting for any particular consultancy firm. Ultimately, the cost of all these compliances should not exceed the benefits attained from them.

GSTR-9

Annual Return under GST (Form GSTR-9)

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Form GSTR-9

Every taxpayer registered under Goods & Service Tax is required to file an annual return in the form of GSTR-9. It is required to be filed for every financial year on or before 31st December in the subsequent fiscal year. It is the consolidation of all the returns filed related to that financial year.

Types of returns under Form GSTR-9

GSTR-9     – Is to be filed by every regular taxpayer who has filed GSTR-3b and GSTR-1.

GSTR-9A     – Is to be filed by taxpayers who are registered under composition scheme.

GSTR-9B     – Is to be filed by e-commerce operators who have filed GSTR-8.

GSTR- 9C     – Is to be filed by taxpayers whose turnover during the respective financial year exceeds 2 Crore.

Company Registration | Company Registration Process

Annual return form GSTR-9 is bifurcated in six parts, which are discussedhereunder:

Part-1. Basic Details of taxpayers- Following details under this part is to be provided:

  1. Financial year (which is pertaining to annual return)
  2. GSTIN (15 Digit unique pan based identification number)
  3. Legal Name, and
  4. Trade Name

Part 2. Details of Outward and Inward supplies Declared during the respective financial year in the various returns filed-

  1. Following details of Outward Supplies are to be provided:
  2. Taxable Supplies
  3. Non Taxable Supplies ( i.e zero-rated and nil rated supplies )

Note: It is important to note that only supplies that are declared in GSTR-1 and GSTR -3b are to be shown in this part. If details are not shown in returns, the same is to be declared in Part-5.

Part 3. Details of all the input tax credit that has been availed and reversed during the financial year-

  1. Following details of Input Tax credit availed and reversed are to be provided:
  2. Details of input tax credit that has been availed through GSTR-3B during the financial year
  3. Details of Transitional credit availed through TRANS-I and TRANS-II
  4. Details of Input tax credit reversed and ineligible credit as per rules 37,39,42,43 and Section 17(5).
  5. Details of Transitional credit reversed.
Accounting & Auditing Services

Part 4. Details of Tax liability paid during the financial year.

Payment made under GSTR-3b and Table 6-A are to be provided here

Part-5. Details of the transaction pertaining to respective financial year but declared  in the returns of April to September of following year or date of filing annual return whichever is earlier:

  1. Following details regarding such transactions are to be provided:
  2. Details of Outward and Inward Supplies (attracting reverse charge) declared through amendments.
  3. Details of Input tax credit availed for the respective financial year
  4. Details of reversal of Input tax credit reversed for the respective financial year
  5. Taxes paid for the respective financial year.

Part-6. Details of other information to be provided (Not covered in above-mentioned Parts)

  1. Details of refund received/sanctioned/rejected.
  2. The demand for the tax assessed by departments
  3. Outward Supplies received from composition dealers
  4. Hsn wise summary of Outward Supplies
  5. Late Fees payable or paid for the financial year.
GST Registration

The due date for filing of annual return form GSTR-9

Due date is on 31st December of the following year

(CBIC has extended the date for the financial year 2017-18 to 31st March 2019.)

Online GST Return Filing

Know about Reverse charge mechanism under GST Regime

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Reverse charge mechanism under GST

It is called a reverse charge because under this mechanism, the person at the receiving end, that is the receiver of goods or service is liable to pay GST.

CASES WHEN REVERSE CHARGE WILL APPLY

  1. The supply made by the unregistered dealer to a registered dealer.
  2. Services through an e-commerce operator. For example, Urban clap is liable to pay service tax and not the service providers registered with them who are actually delivering the services to customers.
  3. Specified List of goods and services as mentioned by the Central Board of Excise and Custom.
Company Registration

Time of supply-FOR GOODS under Reverse charge mechanism:

Earliest of the below:

  1. Date of receipt of goods
  2. Date of Payment
  3. 30 days from the date of issue of an invoice by the supplier

If it becomes impossible to determine based on the above three points then the time of supply shall be the date of entry in the books of account of the recipient.

Time of supply-FOR SERVICES under Reverse charge mechanism:

Earliest of the below:

  1. Date of payment
  2. 60 days from the date of issue of an invoice by the supplier

If it becomes impossible to determine based on the above two points then the time of supply shall be the date of entry in the books of account of the recipient.

Time of supply-If supplier is located outside India

Earliest of the below:

  1. Date of payment
  2. The date of entry in the books of account of the receiver
FSSAI REGISTRTAION

Input Tax Credit under RCM

A supplier cannot take an input tax credit of GST paid on goods or services on which the recipient is liable to pay tax by gst return filing online.

  • The service recipient can avail Input Tax credit or ITC on the Tax amount that is paid under reverse charge on goods and services.
  • Provided that the goods and services are used or will be used for business or furtherance of business.
  • Under RCM ITC cannot be used to pay output tax, Therefore the payment mode is only through cash under reverse charge.

For any queries relating to goods and service tax, Online GST Return filing in India and, other GST services you can contact professionals through our online platform of CAONWEB. Here, you can find professionals having expertise in providing services of GST filing to various clients.

eway

Know all about E-way bill system introduced in GST

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An electric waybill is required for movement of goods. For any movement of goods by a registered person for the value of more than Rs.50000 e-way bill is mandatory. The e-way bill can be generated on the Goods and Service Tax portal. This is required for interstate and intrastate both. Generation of the e-way bill is compulsory from 1st Feb 2018.

Who is required to generate E-way bill or when should an e-way bill issue?

  1. The registered person when there is the movement of goods
  2. In relation to the supply like normal sale activity
  3. In relation to the return of sale, transfer from one branch to another
  4. Inward supply from an unregistered person. Unregistered Person making movement of goods

Note: When supply is made by an unregistered person to a registered person, the party receiving goods will have to fulfill the compliances. Transporter also needs to generate the e-way bill if the supplier has not generated the e-way bill.

When is e-way bill not required?

  • Transporting goods within the same state for distance less than10 km from the place of business of transporter to the person receiving goods or from the place of a supplier to the place of the transporter.
  • The mode of transportation is the non-motor vehicle
  • Goods transported from port, airport, air cargo complex or land customs station to Inland Container Depot (ICD) or Container Freight Station (CFS) for clearance by Customs.
  • Transport of specified goods

Documents required for an e-way bill

  • Invoice or Bill of Supply or challan relating to the consignment of goods.
  • Transportation by road – Transporter ID or Transporter Vehicle number.
  • Transportation by rail, by air, or by ship – Transporter ID, Transport document number, and date on the document.

The validity of the e-way bill

The date is computed from the time of generation of the e-way bill.

Distance Validity of EWB
Less Than 100 Km 1 Day
For every additional 100 Kms or for part thereof additional 1 Day

Cancellation of the e-way bill

E-way bill can be canceled if goods are either not transported or goods transported are not as per the details filled up in the e-way bill.

However e-way bill cannot be canceled if it has been verified in transit.

States notifying the e-way bill

States that have notified e-Way bill for mandatory inter-state transport of goods:

  • Karnataka
  • Uttarakhand
  • Rajasthan
  • Kerala

Rest of the 25 States and 7 Union territories have joined the e-Way Bill league on trial basis till 31st Jan 2018.

Starting from 1st Feb 2018, all the registered suppliers or the transporters or recipients as the case may be belonging to these 25 States and 7 Union territories are required to compulsorily generate e-Way Bill for Inter-State movement of goods.

13 States have agreed to implement e-Way Bills for Intra-State movement of Goods with effect from 1st February 2018. These are:

  • Andhra Pradesh
  • Arunachal Pradesh
  • Bihar
  • Haryana
  • Jharkhand
  • Karnataka
  • Kerala
  • Puducherry(UT)
  • Sikkim
  • Tamil Nadu
  • Telangana
  • Uttar Pradesh and
  • Uttarakhand

For any queries relating to goods and service tax, new GST registration process in India, GST filing in India and, other GST services you can contact professionals through our online platform of CAONWEB. Here, you can find professionals having expertise in providing GST services to various clients.

igst

A Brief explanation about Integrated Goods and Service Tax

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IGST is a part of Goods and Service Tax (GST)

IGST means Integrated Goods and Service Tax, one of the three categories under Goods and Service Tax (CGST, IGST, and SGST) with a concept of one tax one nation. IGST falls under Integrated Goods and Service Tax Act 2016.

IGST is charged when movement of goods and services from one state to another. For example, if goods are moved from Tamil Nadu to Kerala, IGST is levied on such goods. The revenue out of IGST is shared by the state government and central government as per the rates fixed by the authorities.

As per GST Law:

Under the GST regime, an Integrated GST (IGST) would be levied and collected by the Centre on the inter-State supply of goods and services. Under Article 269A of the Constitution, the GST on supplies in the course of interState trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council.

Under GST, IGST is a tax levied on all Inter-State supplies of goods and/or services and will be governed by the IGST Act. IGST will be applicable to any supply of goods and/or services in both cases of import into India and export from India.

Note: Under IGST,

  • Exports would be zero-rated.
  • The tax will be shared between the Central and State Government.
sgst

A Brief simple explanation about State Goods and Service Tax (SGST)

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SGST is a part of Goods and Service Tax (GST).

SGST means State Goods and Service Tax, one of the three categories under Goods and Service Tax (CGST, IGST, and SGST) with a concept of one tax one nation. SGST falls under State Goods and Service Tax Act 2016.

For easy understanding, when SGST is being introduced, the present state taxes of State Sales Tax, VAT, Luxury Tax, Entertainment tax (unless it is levied by the local bodies), Taxes on lottery, betting and gambling, Entry tax not in lieu of Octroi, State Cesses and Surcharges in so far as they relate to the supply of goods and services etc. are subsumed.

The revenue collected under SGST is for State Government.

Under GST, SGST is a tax levied on Intra State supplies of both goods and services by the State Government and will be governed by the SGST Act. As explained above, CGST will also be levied on the same Intra State supply but will be governed by the Central Government.

Note: Any tax liability obtained under SGST can be set off against SGST or IGST input tax credit only.

cgst

A Brief explanation about Central Goods and Service Tax

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CGST is a part of Goods and Service Tax (GST)

CGST means Central Goods and Service Tax, one of the three categories under Goods and Service Tax (CGST, IGST, and SGST) with a concept of one tax one nation. CGST falls under Central Goods and Service Tax Act 2016.

For easy understanding, when CGST is being introduced, the present central taxes of Central Excise Duty, Central Sales Tax CST, Service Tax, Additional excise duties, excise duty levied under the medical and toiletries preparation Act, CVD (Additional Customs duty – Countervailing Duty), SAD (Special Additional Duty of customs) surcharges and cesses are subsumed.

CGST is charged on the movement of goods and services of standard commodities and services which can be amended from time to time by a separate body. The revenue collected under CGST is for Centre. However, input tax credit on CGST is given to states and such input tax could be utilized only against the payment of Central GST.

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Advantages of GST

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  1. GST Eliminates the Cascading Effect of Tax

GST is a comprehensive indirect tax that was designed to bring the indirect taxation under one umbrella. More importantly, it is going to eliminate the cascading effect of tax that was evident earlier.

Cascading tax effect can be best described as ‘Tax on Tax’. Let us take this example to understand what is Tax on Tax:

Before the GST Regime:

A consultant offering services for say, Rs 50,000 and charged a service tax of 15% (Rs 50,000 * 15% = Rs 7,500).

Then say, he would buy office supplies for Rs. 20,000 paying 5% as VAT (Rs 20,000 *5% = Rs 1,000).

He had to pay Rs 7,500 output service tax without getting any deduction of Rs 1,000 VAT already paid on stationery.

His total outflow is Rs 8,500.

Under GST 

GST on service of Rs 50,000 @18% 9,000
Less: GST on office supplies (Rs 20,000*5%) 1,000
Net GST to pay 8,000
  1. Higher Threshold for Registration

Earlier, in the VAT structure, any business with a turnover of more than Rs 5 lakh (in most states) was liable to pay VAT. Please note that this limit differed state-wise. Also, service tax was exempted for service providers with a turnover of less than Rs 10 lakh.

Under the GST regime, however, this threshold has been increased to Rs 20 lakh, which exempts many small traders and service providers.

Let us look at this table below:

Tax Threshold Limits
Excise 1.5 crores
VAT 5 lakhs in most states
Service Tax 10 lakhs
GST 20 lakhs (10 lakhs for NE states)
  1. Composition Scheme for Small Businesses

Under GST, small businesses (with a turnover of Rs 20 to 75 lakh) can benefit as it gives an option to lower taxes by utilizing the Composition Scheme. This move has brought down the tax and compliance burden on many small businesses.

  1. Simple and Easy Online Procedure

The entire process of GST (from registration to filing returns) is made online, and it is super simple. This has been beneficial for start-ups especially, as they do not have to run from pillar to post to get different registrations such as VAT, excise, and service tax.

  1. The Number of Compliances is Lesser

Earlier, there was VAT and service tax, each of which had their own returns and compliances. Below table shows the same:

Under GST, however, there is just one, unified return to be filed. Therefore, the number of returns to be filed has come down. There are about 11 returns under GST, out of which 4 are basic returns which apply to all taxable persons under GST. The main GSTR-1 is manually populated and GSTR-2 and GSTR-3 will be auto-populated.

  1. Defined Treatment for E-commerce Operators

Earlier to GST regime, supplying goods through e-commerce sector was not defined. It had variable VAT laws. Let us look at this example:

Online websites (like Flipkart and Amazon) delivering to Uttar Pradesh had to file a VAT declaration and mention the registration number of the delivery truck. Tax authorities could sometimes seize goods if the documents were not produced.

Again, these e-commerce brands were treated as facilitators or mediators by states like Kerala, Rajasthan, and West Bengal which did not require them to register for VAT.

All these differential treatments and confusing compliances have been removed under GST. For the first time, GST has clearly mapped out the provisions applicable to the e-commerce sector and since these are applicable all over India, there should be no complication regarding the inter-state movement of goods anymore.

  1. Improved Efficiency of Logistics

Earlier, the logistics industry in India had to maintain multiple warehouses across states to avoid the current CST and state entry taxes on inter-state movement. These warehouses were forced to operate below their capacity, giving room to increased operating costs.

Under GST, however, these restrictions on inter-state movement of goods have been lessened.

As an outcome of GST, warehouse operators and e-commerce aggregators players have shown interest in setting up their warehouses at strategic locations such as Nagpur (which is the zero-mile city of India), instead of every other city on their delivery route.

Reduction in unnecessary logistics costs is already increasing profits for businesses involved in the supply of goods through transportation.

  1. Unorganized Sector is Regulated under GST

In the pre-GST era, it was often seen that certain industries in India like construction and textile were largely unregulated and unorganized.

Under GST, however, there are provisions for online compliances and payments, and for availing of input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to these industries.

Let us now look at the disadvantages of GST. Please note that businesses need to overcome these disadvantages to run the business smoothly.