Before we dive into the format let us take a quick look at what is GST. The Goods and Services Tax is a simple, comprehensive and indirect tax, which will apply to the manufacturers, traders, and consumers of goods and services of the entire country on a wider scale.
- The Goods and Service Tax, Act 2017 came into force w.e.f 1st July 2017.
- This implementation of GST in India leads to major reforms like it has changed the entire structure of indirect taxes with the concept of “One Nation, One Tax”.
- The main purpose of GST was to eliminate the avalanche effect with the motive to make the taxation system stronger and transparent.
- An additional main purpose of GST was to reduce evasion of taxes which used to result in reduction in revenue for the government.
GST Structure in India
The GST in India follows a 4-tier structure:
- Nill rate(0%)-on raw fruits and vegetables, non – processed fabrics, agricultural tools,etc.
- Lower rate(5%) – most of the common consumer services and commodities like frozen vegetables, coffee, tea, rail tickets, economy air tickets, takeaway food, fertilizers, etc.
- Standard rate (12% and 18%) – butter, cheese, handbags, jewelry boxes, cell phones,pasta, pastries, cakes, vacuum cleaners, hairdryers, panels, wires, IT services, telecom services,etc.
- Higher rate (28%) – This mostly consists of luxury products. Some of these items include- tobacco,pan masala, paints, cement, automobiles,etc
Also it is organized in such a way that all the necessary services and some food items are placed in the lowest bracket, and the other luxury goods and services are placed in the highest bracket.
How to apply for GSTIN?
Every business operating in a state or Union territory will be assigned a unique Goods and Services Tax Identification Number or GSTIN.
The steps to apply for it are as follows :
- via GST online portal ‘ https://www.gst.gov.in/ ‘.
- or can visit the GST Seva Kendra set up by the Government of India.
The cost of obtaining GSTIN and registering for GST are free of cost.
The documents required during registration are,
- Permanent Account number (PAN).
- Valid Indian mobile number.
- Valid email address.
- Recommended documents and information on all mandatory fields of Registration Application.
- Place of business.
- Jurisdiction details.
- Valid bank account number from India.
- Indian Financial System Code (IFSC) number of the same bank and branch.
- At Least one Proprietor/Partner/Director/Trustee/Karta/Member with corresponding gvv PAN.
- An authorised signatory who is a resident of India with all the valid documents and details.
You can click here to learn more about identifying and understanding in detail the GST number format.
GST, without a question, is bringing a new and fresh system to India’s indirect taxes, much like a person replacing his old clothes with new and current ones. GST is a significant achievement for such a large and diverse country as India. GST provides greater transparency, a computer-based interface with departments (without the need for human intervention), and cost savings owing to the elimination of the cascade effect. Instead of producing revenue by imposing tax on taxes, it is a good idea to collect tax by expanding the assessee base in the indirect tax system.