GST – Goods and Services Tax Explained in Most Simple Words

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What is GST?
GST or Goods and Services Tax is one of the largest indirect taxation reform in India. It was implemented on 1st July 2017 and aims at transparent tax regime. It is levied on most goods and services sold for domestic consumption. The purpose is to eliminate all indirect taxes and only GST would be levied on both goods and services.

GST Benefits
  • GST replaces various indirect taxes and makes it easier for the business people to pay taxes. GST puts an end to all other taxes that industrialists need to pay. Also, as GST filing is online and the whole process is transparent and easy.
  • GST is a single indirect tax and ensures that there are no taxes on already taxed product. Thus, it reduces hidden costs involved in doing business. One is saved from “tax on tax” throughout the value chain.
GST Returns


What are the components of GST?
There are three taxes applicable:
CGST: Collected by Central Government on intra-state sale: i.e. within the same state
SGST: Collected by State Government on intra-state sale: i.e. within the same state
IGST: Collected by Central Government on inter-state sale: i.e. outside the same state

For example, a dealer is Haryana has sold goods to dealer in Chandigarh worth Rs. 100000 at 18% GST. So, Rs. 18000 will be charged and it will go to Central Government. On the other hand, if the dealer in Haryana sells goods in Haryana worth Rs. 100000 and GST is 18%. Rs. 4500 will go to Central Government and Rs. 4500 will go to Haryana Government.

Who should file GST Returns?
Any regular business has to file two monthly returns and an annual return. This amounts to 26 returns in a year. Separate returns need to be filed by composition dealers. There are different types of GST returns and one files return accordingly.
If you also want to file your GST returns or register at GST, drop us an email at moneysmartsave@gmail.com or contact us.


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