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GST Concepts/Basic Features of GST

GST Concepts/Basic Features of GST

GST Law as going to be implemented in India w.e.f 01.07.2017, have following features:-

  • State-wise single registration for Taxpayer:

    One PAN-One State-One Registration, it means for one PAN only one single GST Registration number for one state will be there. If a person does business in 5 states then he has to apply for registration in five states.

  • GST is imposed in three categories i.e

SGST/UTGST= State /UT Goods and Service Tax.

CGST= Central Goods and Service Tax.

IGST = Integrated Goods and Service Tax.


        Now which tax will apply on which transaction is given below:

                              Intra state transactions:                       SGST/UTGST and CGST

                             Inter state transactions:                        IGST i.e equal to (SGST/UTGST+CGST)

  • GST Council has decided various rates for GST i.e. 0%, 5%, 12%, 18% & 28%. Council has provided schedule of GST      Rates to find which rate will apply on which product. A List of exempted services and exempted goods is also provided by council separately.
  • All work done or goods supplied upto 30-06-2017 for which invoice has also been raised upto 30-06-2017 But only payment is done after 30-06-2017 then GST will not apply on this transaction. This transaction will be taxed as per law applicable before 01-07-2017.
  • A separate list of Services is provided which are under Reverse charge Mechanism. As a new list is provided for Reverse charge, Hence Reverse charge is not applicable as per old list given is service tax regime.  Hence no reverse charge in Works Contract, Rent a Cab, Supply of manpower etc. As per Sec. 9(4) of CGST Act, Reverse charge is applicable in all case where services are purchased by a Registered Dealer from an Unregistered Dealer. In case of Reverse Charge Service Receiver is liable to Pay GST in place of Service Provider (Click here for list of Services under Reverse Charge).
  • A business entity with an annual turnover upto Rs. 20Lakhs (Rs. 10Lakh for special category states i.e. Arunachal Pradesh, Sikkin, Uttrakhand, Himachal Pradesh, Assam and other state of north-east) would not be required to take registration in GST regime unless he voluntarily chooses to do so to be a part of Inpur Tax Credit (ITC) Chain.
  • A business entity with an annual turnover upto Rs. 50 Lakhs (Now revised to 75 Lakhs) can avail the benefit of Composition Scheme under which it has to pay lower rate of tax with minimal compliances.
  • Provision has been made to grant 90% of refund within Seven days of filling of application of refund.
  • Destination or Consumption based tax: GST will be the part of revenue of that state where goods are consumed or services are provided.
  • No concept of free branch transfer, Earlier If a dealer has to transfer any taxable goods or services to branch located in different state then Form ‘F’ was provided to facility this transaction without any tax. But under GST regime no free branch transfer allowed. A person is required to pay GST even on branch transfer.
  • No more issuance of Form ‘C’ required in GST regime.
  • In GST regime, WCT is not required to be deducted under sales tax act.


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