3 Key Things That You Need to Know as Goods and Services Tax, If you are doing business, you must be deposit some tax other than income tax. It could be in the form of service tax, excise duty, VAT or some sort of custom duty. These taxes are called Goods and Services Tax (GST).
But the execution of GST is not simply a change in tax. GST is a way in which indirect taxes will ‘levy’. Currently, excise duty is imposed on the manufacture, VAT is levied each time goods turn hands and value is added to the product. CST (Central Sales Tax) is charged when goods flow between states. This way a complete product can have excise duty, VAT, CST added to its cost before reaching its final customer. All of these have a different spine of the tax charge. These different taxes will now give way to Goods and Services Tax.
Types of GST
Most supplies are possible to be taxed at the rate of the destination state. Supplies made outside Pakistan would not attract any GST, however, GST registration may still be required for these supplies. Intra-state sales will attract Central and State levy, called SGST and CGST. And inter-state sales will attract IGST, which is likely to be a sum total of CGST and SGST. IGST will also be levied on imports.
When is GST imposed?
- You make inter-state sales i.e. you are based in one state and sell assets to a receiver in another state.
- If you sell online assets. You can sell through your website or through an organizer like Flipkart or Amazon.
- We sell goods on behalf of another taxable person.
- You bargain in goods/services on which reverse charge applies—where the buyer has to deposit tax instead of the seller.
- GST does not fit to agriculturists. If you grow your own herbs and sell them, for example, then GST does not apply to you.
- If you deal in released goods/services then GST does not apply to you.
What should you know about GST registration?
If you run a business, you need to get registered and obtain your GSTN number. Firms with turnover less than Rs 20 lakh (Rs 10 lakh for North-eastern states) are not required to register for GST, but the way things are structured, you can easily do this. With every buyer and seller on board, GST will build a sort of a club of its own with advantages, but at the same time come with the cost of being compliant as well adjusting technology as means to do business. Both bets worth the investment. A tax consultant will guide you where the GST can impose.