Ans.It is a destination based tax on consumption of goods and services. In other words, GST would be levied at all stages, starting from manufacture up to final consumption with credit of taxes paid at previous stages available as set off.
Q.Are the existing taxes (i.e. Excise , CST, VAT etc.) be replaced and/ or subsumed under GST ?
Ans.Taxes currently levied and collected by the Central Govt. (i.e. Central Excise Duty, AED, CVD, SAD, Service Tax, Surcharge and Cess) and that levied and collected by State Govt. (i.e. VAT, CST, Luxury Tax, Entry Tax, Purchase Tax, Tax on Lotteries, Entertainment Tax etc.) will be subsumed under GST.
Q.What type of commodities have been kept outside the purview of GST ?
Ans.Alcoholic Liquor for human consumption and Five Petroleum Products viz. Petroleum Crude, Motor Spirit, (Petrol), High Speed Diesel, Natural Gas and Aviation Turbine Fuel have temporarily been kept out and the GST Council shall decide the date from which they shall be included in GST.
Further, Electricity has also been kept out of the purview of GST.
Q.What Type of GST is being implemented ?
Ans.India is a federal country, where both the Central and States have been assigned the powers to levy and collect taxes through appropriate legislation.
In view of the constitutional requirement of fiscal federalism, the GST being implemented at present is dual GST, where both the Centre and States, will be levying it simultaneously on common tax base.
The GST which will be levied by the Centre on intra-state supply of goods and / or services would be called CGST and that levied by the States and Union Territories, would be called SGST and UTGST respectively.
Similarly, IGST would be levied and administered by the Centre on every inter-state supply of goods and / or services.
Q.Which Authority will levy and administer GST ?
Ans.Centre will levy and administer CGST and IGST while the concerned States/ Union Territory will levy and administer SGST / UTGST.
Q.Who will decide rates for levy of GST ?
Ans.The CGST and SGST would be levied at rates to be jointly decided by the Centre and States. The rates would be notified on the recommendation of GST council.
The CGST/SGST and IGST are payable at the rates specified in the schedules to the respective Acts.
Q.Who is liable to pay GST ?
Ans.Under GST mechanism, tax will be payable by the "taxable person" on the supply of goods and / or services.
Liability to tax arises when a taxable person crosses the turnover threshold of Rs. 20 Lakhs (Rs. 10 Lakhs for North Eastern and Special Category States, which has been raised to Rs. 20 Lakhs w.e.f. 01-02-2019), except in certain specified cases, where the taxable person is liable to pay GST, even though he has not crossed the threshold limit.
Tax payers making inter-state supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption.
Small Tax payers having aggregate turnover that didn't exceed Rs.150 Lakhs (Earlier the limit was Rs. 100 Lakhs) , in the preceding financial year, can opt for a simplified composition scheme, where tax will be payable at concessional rates, on the turnover in a state.
Q.Need for GST Audit and when it is required ?
Ans.Every registered person whose “aggregate turnover” during a financial year exceeds two crore rupees, shall get his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of Audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.
Based on these provisions, GST Audit will apply every year for those GST Registered Businesses (GSTIN), whose turnover by Supply of Goods or Service is more than Rs. 2 Crores.
A financial year covers the 12-month period beginning from April of a calendar year to March of the next calendar year.
It is highlighted here that the turnover will be taken for “whole Year” therefore the turnover value of first quarter of pre GST period will be also added to calculate Aggregate Turnover.