What is The Input Tax Credit?
An input tax credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs. Let's say - you are a manufacturer and the tax you pay on the final product is Rs. 600 and on input, the tax is Rs. 400, in that case, you can claim input credit of Rs. 400 and you only need to deposit Rs. 200 in taxes.
Who Should Register for GST?
Following are the entities that should register for GST, apart from businesses whose turnover exceeds Rs. 40 Lakhs.
- Any individual who has registered under the Pre-GST law of Exercise, VAT or Service Tax.
- Any business that is paying taxes under the reverse charge mechanism.
- Any person selling digital information to anyone who is not paying taxes.
- Any person selling online courses.
- Individuals who are supplying inputs through e-commerce aggregators.
- Every business or corporation that is involved in buying and selling should have GST registration.
What Are The GST Tax Rates?
- Items that are considered basic necessities come under the exempt list i.e. they are not taxed.
- Household necessities and life-saving drugs etc. are taxed at 5%.
- Products like computers and processed food are taxed at 12%.
- Hair oil, toothpaste, and soaps, capital goods, industrial intermediaries, and services are taxed at 18%.
- Luxury items are taxed at 28%.
For more information about GST tax rates visit: https://cbec-gst.gov.in/gst-goods-services-rates.html
What is A GST Return?
A GST return is a document that has all details of income that must be filled according to the law with the tax authorities. Under the GST law, a taxpayer has to submit two returns online on a monthly basis and one such return annually. A registered dealer would file GST returns including purchases, sales, output GST (on sales), and input tax credit (GST paid on purchases).
What is GSTIN?
GSTIN is a unique identification number assigned to each GST taxpayer. To verify a GSTIN number a person who has a GST number can log onto the GST portal.
How to Apply for GST Registration Process in India
Here is the step-by-step on how to register for GST:
Step 1: Visit the GST portal online at (https://www.gst.gov.in/).