As opposed to the previous Indian taxation system which included several taxes like Central Excise, Service Tax, State VAT, etc., CGST, SGST, and IGST are the three taxes that the GST regime brings.
We at Vyapaar Pundit have it all covered for you. We help you understand the clear distinction among the three. Also, there is a lot of eye-opening and insightful information awaiting you, as you read on.
Both the CGST and SGST will be collected when a state's borders are crossed to provide goods or services, a practice known as intra-state transactions. In contrast, only IGST will be collected if a supply of goods or services occurs in what are known as inter-state transactions.
Maharashtra and Gujarat collect the most state GST (SGST) on a monthly basis, according to official data from GSTN, the business that processes tax returns, closely followed by Tamil Nadu and Karnataka, a state with a robust IT industry. Karnataka has had the maximum number of GST registrations while UP has a large number of new businesses in the form of MSMEs who apply for GST registration for new business.
1. Delhi: E-invoicing was implemented for enterprises with a turnover greater than Rs 500 crore as one of the fundamental reforms to streamline accounting in organisations. The government has also attempted over the years to help both individual and corporate taxes. Regarding services directly connected to the production of any agricultural output, including cultivation, harvest, threshing, plant protection or testing, as well as the provision of farm labour, taxes have been exempted.
The mandatory necessity of providing a reconciliation statement duly audited by a designated expert and to allow for filing the yearly return on a self-certification basis have both been eliminated by the council. It also gives the Commissioner the authority to exempt a certain group of taxpayers from the yearly return filing requirement. Additionally, attempts have been taken to streamline taxation in terms of logistics for consignment transportation of commodities such as milk, salt, and different types of food grains.
2. Haryana: Around two years ago, the Haryana Government created an Investment Subsidy in lieu of Net SGST of Haryana, which was announced under the Haryana Enterprises & Employment Policy. This attractive incentive program is for many sorts of businesses. For various categories of businesses, the HEEP envisioned a range of financial incentives "for reducing cost of doing business to make the industry competitive and sustainable." The Investment Subsidy in lieu of Net SGST (the Scheme), which is also in keeping with the modifications established in tax administration after the implementation of GST, has been notified by the Haryana government. According to the terms of the Scheme, rather than being paid by utilizing an input GST credit, the amount of reimbursement will only be limited to SGST amounts paid through the cash ledger (described in the Scheme as "Net SGST").
Over the past twenty years, Haryana's commercial sector has gradually expanded. It is also the largest vehicle hub in the nation, producing over 66% of the nation's passenger cars, 50% of its tractors, and 60% of its two-wheelers. The IT industry has also shown impressive growth, making Haryana the third-largest exporter of software services. The state government introduced the idea of a declaration for the transport of goods prior to the introduction of the Eway Bill (i.e., before the introduction of GST).
3. Maharashtra: The Maharashtra Goods and Services Act came into being in the year 2017. Over the years, a number of amendments have been made to it to bring high levels of coordination between the CGST 2017 and MGST 2017. These reforms have been brought about to eliminate current as well as future problems between the taxpayers and the GST department of the state government , and to additionally simplify their processes.
In view of their efforts, the Goods and Services department of Maharashtra was felicitated with the prestigious TIOL award(Tax India Online) for strengthening India’s economy as a major contributor to central tax revenues and also simplifying their tax processes, in line with their ‘Ease of Doing business’ initiative. This has helped industries who hope to set shop in Maharashtra, especially the ones operating out of Special Economic Zones, where companies in SEZ can now opt for separate GST registration numbers, which will make the processing of taxes easier for the authorities as well as for the filing companies, This is especially going to be helpful if you are a new business and wish to apply for GST registration for new business. Also, GST reforms that were implemented in COVID brought down tax rates The department keeps innovating constantly and has digitized their process with the help of apps such as: MAHAGST & MAHAPT. This also makes the process of GST registration online easier. In 26th August 2022, the GST council passed the GST Amendment bill to help make the process of filing taxes and claiming input credit taxes easier.
4. Rajasthan: Zinc and lead, cement, insurance, mining, telecommunications, iron and steel, and real estate are the primary industries that significantly contribute to GST revenue. Rajasthan also makes a considerable contribution to the export of marble, textiles, and handicrafts. The Rajasthan Goods and Services Tax (Amendment) Bill, 2022 was approved by the Rajasthan Assembly and proposes that registration for businesses would not be revoked even if they fail to file the return for six months. Additionally, the procedure for issuing credit notes will begin.
Education minister B.D. Kalla introduced the bill in the house. Following the debate over the measure, Kalla said that it provided several benefits for traders and that doing so would boost state government revenue. The most recent amendment shows that the Bill has been amended to change the input credit tax. After spending the credit tax on an inaccurate claim of input credit tax by the dealer, interest will now be due. The Bill also contains a solution for issuing credit notes. The law also has a clause stating that if the return is not filed for six months, the registration would not be cancelled. Corrections have also been corrected to the GSTR-1, 3, and 8 returns in addition to this. This will stop discrepancies in returns.
5. Gujarat: Following the implementation of the new tax system, known as GST, the state has witnessed some of the greatest tax receipts. Recently, during periods of inflation, their revenues have increased. The Russia-Ukraine war has caused raw material costs to be on the higher side, which has led to an increase in the price of completed items as well. Taxpayers with aggregate turnover above Rs 10 Crore in any prior year are required to provide an electronic invoice starting on October 1, 2022. It should be remembered that this limit was previously set at Rs. 20 crore.
Coming to businesses now, inverted duty rates have been removed for services like:
Producing leather items and footwear
Processing hides, skins, and leather
contract work for roads, bridges, metro, railway, effluent treatment centres,
work contract supplied to central and state governments, or local bodies for infrastructure projects which include construction of dams, canals , etc.
Also, Waiver of interest for several Electronic Commerce Operators (ECOs) for specified tax periods
6. Telangana: Telangana was one among the states that enthusiastically backed the implementation of GST in 2017, thinking it would revolutionise the nation's IT and pharmaceutical hub. In order to maintain equitable pricing on commodities, particularly services, the state's GST statute has undergone numerous revisions over the years, always keeping in mind the interests of consumers and following appropriate stakeholder participation.
There have been some reductions and exemptions from these taxes. For instance, services provided by any organisations or NGOs under the federal "Scholarships for Students with Disabilities" program, where all costs are covered by the government, and thus do not have to separately apply for GST registration. NSIL offers satellite launch services. In accordance with section 2(6) of the IGST Act, the Place of Supply (PoS) of satellite launch services provided by ANTRIX Corporation Ltd to clients outside of India is considered to be "outside India" and is therefore exempt from taxation. The satellite launch services would be taxable if the service user was situated in India. Significant e-commerce developments have also been made in the following areas: services for providing passenger transportation via motorbike, omnibus, or other motor vehicle through Uber, Ola, Rapido, etc., are taxed, Cloud kitchen/central kitchen services that involve cooking and food delivery fall under the category of "restaurant service," as stated in CRNN 11/2017, and are subject to 5% GST [without ITC].
7. Goa: Numerous domestic tourists descended upon the well-known tourist attraction, driving increasing tourism-related revenue in the sunshine State. To stop income leaks, the GST administration has increased anti-evasion efforts throughout the years. The department has been able to identify evaders and boost revenues by combining on - ground monitoring and analytical intelligence. They employ a built-in system called GST Prime, which performs internal analysis after gathering data from various sources.
The Goa Legislative Assembly has revised the Goods and Services Tax, which states that every registered person shall be allowed to claim the credit of qualifying input tax, as self-assessed, in his return, subject to such limitations and restrictions as may be prescribed.
8. Andhra Pradesh: In comparison to the all-India average of 27.8%, AP's GST collection rate in October 2022 was higher than the national average of 28.79%.
The government launched an awareness campaign, particularly in rural regions, to educate people about the intricacies of different services that can be registered in addition to lands and other properties. He urged the authorities to offer alternative work possibilities to raise the living conditions of those who brew booze and gave them orders to obtain daily reports on illegal liquor production from women police in the areas.
9. West Bengal: With the implementation of the Goods and Services Tax beginning on July 1, 2017, indirect taxation in India has undergone an unprecedented upheaval. Multiple taxes and charges were a feature of India's existing indirect taxation system. The Commissioner of Commercial Taxes of West Bengal established the GST Policy Planning Unit at the Directorate by Order Number 4159-CT dated April 27, 2017, with the goal of successfully implementing the GST in the state of West Bengal.
The Directorate of Commercial Taxes in West Bengal has relied heavily on the Information Systems Division (ISD) to establish e-Government in a variety of indirect tax-related areas. As the directorate's internal Information Technology (IT) division, the ISD is crucial to the upkeep and modernization of the IT infrastructure as well as the introduction of new e-services. Since the implementation of GST, ISD has become the foundation upon which the Directorate as a whole operates. For their daily activities under GST, all offices have access to the GST Back Office portal as well as the Internal Website, which contains internal communication and information. The officer can complete all legislative tasks thanks to the Directorate's internal modular application, named IMPACT. The Directorate's internal module application, IMPACT, assists the officer in carrying out all legislative tasks.
10. Punjab: In the current fiscal year, Punjab projects a loss of between Rs 14,000 and Rs 15,000 crore due to the end of the compensation regime. To make it easier for businesses to operate in the state and for taxpayers, the Punjab Cabinet is prepared to amend the Punjab Goods and Services Tax Act, 2017. The change will also assist in rationalising and streamlining regulations relating to refunds and the furnishing of returns. According to an official announcement, this will ensure that interest is only assessed on input tax credits that have been erroneously claimed and used.
A few alterations to HSN codes with a minimum of 4 or 6 digits must be reported by taxpayers in GSTR-I table-12 based on their aggregate annual turnover (AATO) in the prior fiscal year have been proposed. Vehicles rented to State Transport Undertakings or Local Authorities are exempt from GST.
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Written & Compiled by Anusha D.