What is GST?
GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act came into effect on 1st July 2017
In simple words, Goods and Service Tax (GST) is an indirect tax levied on supply of goods and services.
GST is one indirect tax for the entire country.
Under the GST regime, the tax will be levied at every point of sale. In case of intra-state sales, Central GST and State GST will be charged. Inter-state sales will be chargeable to Integrated GST.
Now let us understand that what is Goods and Service Tax – “GST is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition.”
There are multiple Stages an item goes through along its supply chain, from manufacture to the final sale to the consumer.
Let us consider the following case:
- Purchase of raw materials
- Production or manufacturing
- Warehousing of finished goods
- Sale to wholesaler
- Sale of the product to the retailer
- Sale to the end consumer
Goods and Services Tax will be levied on each of these stages which makes it a multi-stage tax.
Let us take an example to understand value addition:
The manufacturer who makes Cake buys flour, sugar and other material. The value of the inputs increases when the sugar and flour are mixed and baked into a Cake.
The manufacturer then sells the Cake to the warehousing agent who packs large quantities of Cake and labels it. That is another addition of value after which the warehouse sells it to the retailer.
The retailer packages the cake in smaller quantities and invests in the marketing of the Cakes thus increasing its value.
GST will be levied on these value additions i.e. the monetary worth added at each stage to achieve the final sale to the end customer.
Consider goods manufactured in Uttar Pradesh and are sold to the final consumer in Haryana. Since Goods & Service Tax is levied at the point of consumption, in this case, Haryana, the entire tax revenue will go to Haryana and not Uttar Pradesh.
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Easily file GST returns
You can now avoid the pain of segregating invoice-wise information as required by GST return forms. our software helps you automatically fill your returns based on the type of transactions.
Our System Generates the Complete GST return according to the transaction that your business made, you can easily export GST returns in MS Excel format from our software and share with your CA or Accountant, or you can also easily file it yourself by exporting data into CSV format using our software and use the external utility tool shared by GSTN.