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GST The Realm of Taxation

Nov 22, 2021 Alankit

The GST Regime The regime under which multiple taxes including VAT, excise, CST, etc. have been replaced by a single tax is known as Goods and Services Tax (GST), making major changes to the accounts the business owners have to maintain. Earlier every business entity had to maintain different accounts for every separate input and credit entry, but with the introduction of GST, a new tax regime has come into action.

In other words, the GST is an indirect tax that is levied on the supply of goods and services on every value addition, creating a single domestic indirect tax for the entire country. Under this regime, the tax is levied at every sale point. In case of intra-sales, the Central GST and the State GST are charged being integrated into GST as a whole.

Objectives of the GST Regime

The GST came into existence in 2017 with multiple objectives including:

  • Achieving the ideology of One Nation, One Tax
    All of the previous taxes that existed until 2017 are now under one tax regime, resulting in achieving the motive on One Nation, One Tax.
  • Subsume a majority of the indirect taxes in India
    The introduction of GST has reduced the burden of multiple taxes in the name of Service Tax, Value Added Tax (VAT), and the likes of it on taxpayers and has eased tax administration for the government.
  • Eliminating the cascading effect of taxes
    The primary objective of GST can be termed as the removal of a knock-on effect on taxes, eliminating the issue of setting off the tax credit of one tax against the other. So with the introduction of GST, the tax levied became the only net value added to each stage of the supply chain, helping in removing the cascading effect of taxes and resulting in contributing to the seamless flow of input tax credits across both goods and services.
  • To restrain tax evasion
    The law of GST in India is far stricter than any other law of indirect taxes. This is because, under GST, the taxpayers can claim a tax credit input only on invoices uploaded by their respective suppliers. In this manner, there are minimal chances of claiming input tax credits on fake invoices.
  • To increase taxpayer base
    The tax base in India has been widened with the help of GST, as earlier there was a different threshold limit of each tax law available for registration; based on turnover. Nonetheless, the strict laws comprising tax credit inputs have helped bring certain unorganised sectors under the tax net.

Advantages of GST

GST has eliminated the cascading effect on the sale of goods & services and the removal of this chain reaction has impacted the cost of the goods by reducing the cost on them.

GST does not only eliminate the traditional taxes but shares other advantages too:

  • Higher threshold for GST registration
  • Composition scheme for small businesses
  • Simpler online facilities for GST compliance
  • Relatively lesser compliances under GST
  • Defined treatment for e-commerce activities
  • Increased efficiency in logistics
  • Regulating the unorganised sectors
  • Removing the knock-on effect of tax

The GST Return Filing

A businessman or a taxpayer must declare in their GST return, the revenue that they generate from carrying out business transactions, as GST return is a document that includes all the records of your sales, purchases, output tax (tax collected on sales), and input tax (tax paid on purchase), as a consequence, you have to pay the tax liability that you owe to the government.

Who Can File GST Returns

According to the nature of ones business, all the business owners and dealers who have registered under the GST regime can file their GST returns. For example:

  • Regular business
  • Businesses registered under the composition scheme
  • Other types of business owners and dealers

These businesses must file a GST return timely to avoid the interest and late fee that follows. The late fee is Rs. 25 per day per Act:

CGST: Rs. 25/ day

SGST: Rs. 25/ day

IGST: No late fee charge

In conclusion, the charges applicable on GST return filing will be CGST + SGST i.e. 25+25= 50/day. In case, if a business owner or a dealer fails to file the GST returns, then the subsequent returns cannot be filed. Hence, to avoid heavy fines and penalties and reduce the cascading effect, one must file their GST return on time.

To efficiently utilise and understand the flow chart of GST one needs expert guidance and assistance and our team of experts atAlankit are ready to assist you in the best possible manner to efficiently file your ITR on time and reduce the risk of penalties.

Know More: Types of GST and everything you need to know about GST

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