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Imagine you walk into a store, pick up your favourite gadget, and make a payment at the counter. That simple act of buying and selling is what keeps businesses running—and more importantly, it forms the foundation of taxation under the Goods and Services Tax (GST) system...
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Though all corns do not pop, this one did pop from the basket of GST Council and unintentionally hit the critics!
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One of the most stringent actions under the GST law, particularly in respect of goods and/or conveyance, is ‘Confiscation’, which by definition means ‘permanent appropriation’ of said goods and/or conveyance by the Government, for violation of the provisions of the Act or the Rules made thereunder. However, the confiscation can only take place after due process of natural justice i.e. issuance of Show Cause Notice and giving an opportunity to the alleged offender to be heard in person. Under CGST Act 2017, the powers of Confiscation have been provided under Section 130.
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GST (Goods and Services Tax) is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. In India, it was implemented on July 1, 2017, replacing multiple cascading taxes levied by the central and state governments. The GST system works on the principle of "one nation, one tax" and follows a dual structure where both the Centre and States have the power to levy and collect taxes through the Central GST (CGST) and the State GST (SGST). For inter-state transactions, Integrated GST (IGST) is applicable. GST operates on an input tax credit (ITC) mechanism where businesses can claim credit for taxes paid on inputs, thus avoiding the cascading effect of taxes. This system promotes transparency, reduces tax evasion, and simplifies the taxation process for businesses across India.
Here are the different types of GST returns as per the GST regulations:
1. GSTR-1: Monthly return for outward supplies of goods and services.
2. GSTR-2: Monthly return for inward supplies (currently suspended).
3. GSTR-3: Monthly return for the summary of inward and outward supplies (currently suspended).
4. GSTR-3B: Simplified monthly return for summary of outward and inward supplies, along with tax paid.
5. GSTR-4: Quarterly return for composition taxpayers.
6. GSTR-5: Return for non-resident taxable persons to report their inward and outward supplies.
7. GSTR-6: Return for Input Service Distributors (ISDs).
8. GSTR-7: Return for tax deducted at source (TDS).
9. GSTR-8: Return for tax collected at source (TCS) by e-commerce operators.
10. GSTR-9: Annual return for regular taxpayers, providing a summary of all turnover and input tax credit.
11. GSTR-9A: Annual return for composition taxpayers (no longer applicable post-GST amendments).
12. GSTR-10: Final return required upon cancellation of GST registration.
13. GSTR-11: Return for persons having Unique Identity Numbers for claiming a refund of taxes paid.
Input Tax Credit (ITC) refers to the credit that businesses can claim for the tax they have paid
on inputs used in the course of their business operations. Here's a concise overview of ITC:
1. Eligibility: A registered taxpayer is eligible to claim ITC on purchases made for business
purposes, provided they have valid tax invoices and the goods or services are used to make
taxable supplies.
2. Conditions: ITC can be claimed only if the tax charged on the purchase is paid to the
government.
3. Types of Supplies: ITC can be claimed on both inputs (goods) and input services used for the
business. It also applies to capital goods.
4. Block Credits: Some items may not be eligible for ITC, such as goods purchased for personal
use or certain exempt supplies.
5. Reversal of ITC: If inputs are used for exempt supplies, ITC must be reversed proportionately
according to the extent of use for exempted activities.