GST stands for Goods & Services Tax, a concept that aims to radically change the format of doing taxes in our country. It is a compendious, destination-based form of taxation that helps levy on every element of pure value addition – on the supply of distinct goods and services. The CGST (Central Goods and Services Tax) Act states that all certified and enrolled people should be accredited a compliance rating with due respect to variant legal parameters, which can also be placed in public domain. In other words, a potential customer will be transparent to the compliance ratings of suppliers and decide on forthcoming decisions with a better perspective. At DKM Online, we believe that compliance management is of utmost importance as it ensures smooth business operations.
Below are various parameters of the CGST Act:
• Timely uploading of invoices
• Regular filing of returns
• Fair and re-checked reconciliations
• Communion and cooperative attitude towards taxation authorities
Taxes at State and Central Level constituted under the GST: –
1. Purchase Tax
2. Sales tax
3. Entertainment Tax (except the tax levied by local bodies)
4. Tax on lottery, gambling and betting
5. Central Sales Tax (levied by the Centre and collected by the States)
6. Entry and Octroi Tax
1. Additional Excise Duty
2. Service Tax
3. Central Excise Duty
4. Special Additional Duty (Customs)
5. Countervailing Duty (Additional Customs Duty)
Both – the State as well as the Central GST – will be summoned contemporaneously on every single transaction of goods and services provided to the general public. Here, both forms of taxes are levied on with the same value unlike the State VAT or Central Excise.
Benefits of GST
To the Market/Industry
1. Conformity in the structural procedures and architecture of taxation.
2. Digitalizing will benefit in efficient record-keeping and maintenance of data for activities like enrollments, payment, returns etc. and providing an easy access to the taxpayers through online portals.
3. There will be immense improvement of competition in the market with reduction in transaction costs for trading.
4. Removal of cascading.
5. Reduces the cost of locally manufactured goods and services.
To the Potential Consumer
1. Transparent form of tax proportionates to the true value of goods and services without any manipulation.
2. The total and overall tax burden is reduced – increasing gains and decreasing leakage rates – benefitting the potential consumers.
To the Govt.
1. Easy administration and access to tax-related data with the help of unique and robust, end-to-end IT systems.
2. The government will save the cost of tax collection, significantly leading to higher revenue efficiency.
The elements of a GST Compliance Rating includes the name of taxpayer, along with his identification number (GSTIN) which is altogether uploaded, preserved and maintained in the public domain of the official GST Network website. This will reduce chaos, although the taxpayer will have to advance a high compliance rating. For any further details on your Compliance related queries you can get in touch with us here.
Fields impacted of business’s compliance ratings of GST: –
Administrative Treatment: The higher compliance rating you possess, the more likely are you to be prioritized in the GSTN System.
Scrutiny & Auditing: Compliance ratings are bound to keep the things in order, maintaining consistent functioning.
Opportunities in the Market: The system provides transparency between the potential partners and the taxpayer. This helps individuals to grasp the right opportunities and forgo the wrong decisions. For instance, the new law states invoice matching for ITC (Input Tax Credits) and hence no potential business partner or associate would want confederation with an individual who causes disrupted problems with their ITC cycle, increasing expenses.
Hence, GST and its compliance ratings will affect the economy of our country in a positive manner, thus efficiently producing better cash flow as it is stated as the most high-reaching, zealous & ambitious tax reforms in the history of India post independence.
You can speak to our Payroll Consultants and Tax Consultants for any further detailing on the GST Compliances. Apart from that you can also speak to the Compliance team for any update on HR and Labor Compliances. We can be reached on firstname.lastname@example.org
You can read more about GST on our blog here