The Indian government introduced goods And Services Tax or GST in July 2017. GST, an indirect tax in nature, brought a comprehensive and multistage tax system that is imposed on every value addition.
GST aims to provide a unified platform to taxpayers and a single document (GSTR 9) to carry all their tax return details.
On December 2019, GST revenue collection reached Rs.1.03 lakh crore, of which CGST was Rs.19,962 crore, SGST was Rs.26,792 crore, and IGST was Rs.48,099 crore.
It is the ninth time since GST’s inception in 2017 that the total revenue crossed Rs.1 lakh crore mark, representing almost 16% hike in revenue generation on a year on year basis.
History of GST
The conception of GST was introduced in the year 2000 when a committee was created to draft a GST law. But it took 17 years from then for this law to be implemented.
On 29th March 2017, this law was passed by the Indian Parliament, and on 1st July this law came into effect.
Why GST?
GST was implemented to remove the cascading effect of taxes on the sale of goods and services. This has impacted the cost of goods significantly, primarily due to the fact that it has removed the tax on the tax system.
In the pre-GST tax system, there were several indirect taxes levied by both central and state government. States mainly collected VAT (Value Added Tax), where every state has a different set of rules and regulations.
The Central Government taxed interstate sales under CST (Central State Tax). This taxation system led to an overlapping of taxes.
Here is a list of taxes that were replaced or omitted by GST.
- State VAT
- Central Sales Tax
- CESS
- Special Additional Duty of Customs
- Purchase Tax
- Entertainment Tax
- Luxury Tax
- Entry Tax
- Taxes on Advertisements
- Taxes on Lotteries or Betting or Gambling
- Duties of Excise
- Central Excise Duty
- Additional Duties of Excise
- Additional Duties of Excise
Apart from replacing all these taxes, GST has brought a much simpler tax system that is easy to understand. Also, it is an entirely online system starting from registration, tax return filing, refund application, to respond to notices.
All these operations can be performed after successful goods and service tax login in the GST portal. Unlike the previous systems, manufacturers or consumers don’t have to go to different portals or offices to pay their taxes, they can fill the forms and pay their due GST online altogether.
Taxes under GST
GST is comprised of three taxes, CGST, IGST and SGST.
CGST: The Central Government collects this tax on an intra-state sale. Example, transactions that are happening within West Bengal.
IGST: The Central Government also collects this tax on an inter-state sale. Example, transactions are happening between Goa and Karnataka.
SGST: The State Government collects this tax on an intra-state sale. Example, transactions are happening within Punjab.
What is GSTR9?
GSTR 9 is the annual tax return, filed by every taxpayer who has registered their organisation under GST. It carries details of inward and outward supplies received or made during a year under various tax heads, like CGST, IGST and SGST.
This consist of an amalgamation of every monthly/quarterly return (GSTR-1, GSTR-2A, GSTR-3B) filed during that year.
Details required for GSTR9
GSTR 9 is divided into 19 sections and 6 parts and each of them require necessary details of previous returns.
Largely, this form asks for disclosure of annual transactions (inward and outward) and then separating it between the cases that are subjected to tax or not. One needs to submit the following documents to fill-up the form.
- Necessary details of any taxpayer
- Details of outward and inward supplies
- ITC claimed or reversed
- Taxes paid or adjusted
- Previous year’s transactions
Late fee and penalty
A late fine of Rs.100 per day will incur on taxpayers who will fail to file their GSTR 9 within the due date. This means a late fee of Rs.100 under SGST and Rs.100 under CGST will be applicable.
But no late fee on IGST has been implemented yet. Taxpayers must remember or keep an eye out for the due date to avoid this situation.
Who should file
Every taxpayer who is registered under GST has to file this return form. GST has been one of the most significant tax reforms of India in recent times.
It was introduced to make the taxpaying process smooth and hassle-free by implementing a single-window taxpaying structure like GSTR 9.
GST has improved tax collection in India and boosted the Indian economy by removing different tax barriers through a uniform system.