Understand GST with these 25 Frequently Asked Questions (FAQ)
Question 1: What is GST?
Answer: GST simply means Goods and Service Tax. It is a destination-based tax on consumption of goods and services in India.
Question 2: What is place of supply in GST?
The place of supply or place of consumption is what determines whom the tax is accrued to.
Question 3: Who bears the burden of GST?
The tax burden is borne by the final consumer. GST is in the form of an indirect tax on the supply of goods and services.
Question 4: Which tax does the GST subsume?
The dual GST subsumes the taxes and levies on items previously collected by the central and the state. It will be levied simultaneously both by the central, in the form of intra-state supply of goods (CGST) and the state (SGST/UGST). The tax levied by the central on the inter-state supply of goods and services is called Integrated GST (IGST).
Question 5: What are the exempted items under GST?
All formerly taxable items by the central and the state are taxable except alcohol, petrol and petroleum products, electricity and real estate.
Question 6: How can I register my business with GST?
Go to the GST website on any of your devices and do the registration.
Question 7: What is GSTIN?
GSTIN is the identification number given to every registered supplier.
Question 8: Can I register multiple businesses under one GSTIN?
Yes. It is possible to register multiple businesses under the same GSTIN as long as they are in the same state.
Question 9: Do e-commerce suppliers pay GST?
Yes. An electronic commerce operator is mandated to register for and pay GST irrespective of the value of the supply made by them.
Question 10: What are the various forms of returns on GST?
The returns are varied from GSTR-1 to GSTR-11.
Question 11: When is the GST filing return due?
The due date for filing return is based on the form of GST return a taxpayer subscribes to.
Question 12: In what way does one get penalized for non-filing or late filing?
You pay a late fee of Rs. 100 for every day of delay after the due date to a maximum of five thousand Rupees. Refusal to file attracts a penalty ranging from 10% of the tax not paid or ten thousand Rupees.
Question 13: What is composition scheme?
This is a scheme under GST, which allows small taxpayers whose turnover is less than Rs.1.0 crore to pay tax at a fixed rate of turnover.
Question 14: How does GST benefit small business?
GST makes tax filing convenient for small businesses. It also gives better Input Tax Credits (ITC) and makes inter and intra state tax filing uniform.
Question 15: As a small business owner, do I need accounting software for my GST filing?
Yes. You need small business accounting software for easy tax filing and access to GTN.
Question 16: How does online accounting software benefit small business?
It becomes easy to input and collates your invoice with accounting software. Accounting software also calculates the tax payable on each supply for you and tax return filing becomes automated.
Question 17: Will the department be able to read my accounting software?
Question 18: What is ITC?
Input tax credit is a means of reducing the tax liability by lowering taxes paid on inputs from taxes paid on output.
Question 19: Do taxpayers who benefit from the composition scheme enjoy ITC?
Question 20: What is HSN and SAC code?
HSN refers to Harmonized System of Nomenclature. It is an 8-digit code use to classify the amount taxable on different goods. Service accounting code (SAC) is used to classify services.
Question 21: What is the reverse charge mechanism?
This is a case where the recipient of goods and services is liable to pay the tax instead of the supplier.
Question 22: Does the reverse charge applicable to only goods?
No. the reverse charge applies to both goods and services
Question 23: What is PAN?
PAN simply means Permanent Account Number. This is required for anyone to register for GST except the non-resident taxable person.
Question 24: Who is a non-resident taxable person?
A person residing outside India but making a taxable supply in India is a non-resident taxable person.
Question 25: Can I cancel my GST registration?
Yes. However, you must meet certain conditions to discontinue using GST.