Introduction To GST:
- GST stands for ‘Goods and Services Tax’.
- The brand ambassador chosen to promote the Goods and Services Tax (GST) was Amitabh Bachchan.
- The first nation to implement GST in 1954 was France.
- India has adopted the GST model from the Country, Canada.
- GST is 122nd Amendment Bill, 2014 and 101 Constitutional Amendment Act.
- 101 Constitutional Amendment Act, makes sure that the various indirect taxes are paid to the government by introducing a substitute; in the form of GST, making it a single indirect tax. GST is a comprehensive tax, which permits both the Central government and the State governments to assess excise duty, Octroi tax, customs duty, service tax, entry tax, entertainment tax, other indirect taxes, all substituted by the GST.
- Assam was the first State to accept GST, whereas, Jammu and Kashmir was the last State to implement GST.
- The Vijay Kelkar Committee recommended GST.
- GST was introduced with the intent to demolish the cascading effect which was prevalent before its introduction. The cascading effect is defined as the tax which is charged on taxes paid. It increases the price payable of goods and services.
Features of GST:
- GST stands for Goods and Services Tax.
- It is a One Nation One Tax.
- GST is a substitute for all the indirect taxes.
- It is of an indirect nature.
- GST is a comprehensive tax.
- It reduces the transaction and compliance costs.
- Reduces tax evasion, dishonest dealings or frauds.
- GST includes 17 types of indirect taxes.
- It is a multi-staged or multilevel tax.
- GST has a unique number known as the (GST- IN) GST- Identification Number consisting of 15 digits.
- It is a destination based tax. For example; A car is produced in Maharashtra and further sold in the State of Gujarat, in this case the consumer state which is Gujarat, will be considered as the destination of the tax. The consumer state will get the tax.
- The GST offers facility of multislabs of tax rates which range from 0% to 28%.
- It is based primarily on VAT (Value Added Tax) and further demolishes the cascading effect.
The cascading effect is defined as the tax which is charged on taxes paid. It is the tax which is levied on goods and services at every stage. The tax that is levied on the value includes the tax that was paid by the previous buyer. This means that the consumer ends up paying tax on tax that was already paid. It increases the price payable of goods and services.
Types of GST:
- CGST: CGST stands for Central Goods and Services Tax which is used to replace various taxes like service tax, excise duty and this is charged and collected by the Central government.
- SGST: SGST stands for State Goods and Services Tax which is used to replace taxes like sales tax, entry tax and it is charged and collected by the State government.
- IGST: IGST stands for Integrated Goods and Services Tax, is the combination of the CGST and SGST which is charged and collected by the Central government.
- UT-GST: UT-GST stands for Union Territory Goods and Services Tax. This consists of the CGST and the UT-GST.
The E-Way Bill System:
The E-Way Bill system emerged after the introduction of GST (The Goods And Services Tax). E-Way Bill is an electronic document generated on the GST portal evidencing movement of goods from one place to another.
E-Way Bill or an Electronic Way bill is required for movement of goods under GST. Transporters should carry an e-Way Bill when moving goods from one place to another, valid across India if value of consignment exceeds the specified certain threshold limit.
E-Way bill system is for GST registered person / enrolled transporter for generating the way bill (a document to be carried by the person in charge of conveyance) electronically on commencement of movement of goods exceeding the value of Rs. 50,000 in relation to supply or for reasons other than supply or due to inward supply from an unregistered person.
- THE GST COUNCIL
Form:
The E-Way Bill consists of two components:
Part A Comprising of the details of the supplier, GSTIN of the recipient , the place of delivery (pincode), invoice number, date of transaction, value of goods involved, HSN code, transport document number (Goods recepit number/ Railway recepit number/ Airway Bill number/ Bill of Lading number) and reasons for the transportation.
Part B Comprises of Transporter details, registered vehicle number, driver’s details, licence of the driver.
Issuer (Authority To Issue):
Every registered person who causes the movement of goods of consignment value more than Rs. 50,000/- is required to furnish above mentioned information in the part A of E-Way Bill, prior to the commencement of movement of the goods. The part B containing the tranporter and further transportation details help in the generation of the E-Way Bill.
E-Way Bill or the Electronic Bill is to be generated by the registered person who causes the movement of goods from one place of business to another.
Important Cases:
- If Authorized, transporter can also file part A.
- In case of Bill to Ship Model, only issuance of one E-Way Bill is required (any customer can file). For Example, Consigment of goods is required by A, B arranges from C. So in this case the E-Way Bill can be generated either by A or B.
- If consignment value of goods exceed Rs. 50,000/- and consignor and consignee do not or fail to issue an E-Way Bill then it is the mandatory responsibilty of the transporter to generate the E-Way Bill.
- In case of change of conveyance, there needs to be an update in the E-Way Bill.
- Consolidated E-way Bill? Consolidated E-Way bill cannot be issued, only a single document can be isssued. Multiple E-way bills for multiple consignments.
Validity:
Before the commencement of the transportation procedure from one place of business to another, consignment goods which are worth more than Rs. 50,000/-, require an issue of an E-Way Bill on the GST portal.
An E-Way Bill is generated and a unique E-Way Bill number is assigned and told to the supplier, the recipient and the transporter.
The generated E-Way Bills can be cancelled on the GST portal within 24 hours if there is a change in the plan of action.
The validity period of an E-Way Bill depends on the distance of the goods to be transported in the normal course of business. The standard validity is one day for every 200 kilometers or part thereof. For example, an e-way bill generated for a consignment meant to travel 400 kilometers will be valid for two days from the time of generation.
The Validity of E-Way Bills directly varies with the change of distance:
- <100KM = 1 DAY
- 100-300KM = 3 DAYS
- 301-500KM = 5 DAYS
- 501-1,000KM = 10 DAYS
- >1,000KM = 15 DAYS
Ultimate Objective:
The E-Way Bill system is a mechanism built to ensue that goods being transported, comply with the GST Law and is an effective tool to keep a strategic track of the movement of goods and a check on taxes.
The E-Way Bill provisions aim to remove the evasion of taxes prevailing under the VAT System of Tax implication.
The E-Way Bill provisions and framework under GST bring an uniform e-way bill rule which will be applicable across the country.
Execution/ Implementation:
The E-Way Bill system has been introduced nation-wide for all inter-state movement of goods with effect from 1/4/2018. As regards intra-state supplies, option was given to States to choose any date on or before 3/6/2018.
Mandatory Issuance of the E-Way Bill:
- Inter-state movement of goods by the Principal to job workers.
- Inter-state transfer of handicraft goods by a person exempted from taking registration. Certain handicraft items are exempt from GST, provided they meet specific criteria set by the GST council. This exemption aims to support small artisans by reducing their tax liabilities and encouraging the production of traditional handicrafts. However, the Government requires an issuance of an E-Way Bill to keep a record of the transactions taken place.
When exactly is the E-Way Bill required?
In case of movement of goods from one place to another and the consignment value of such goods exceed Rs. 50,000/-. The amount calculated includes the consignment value of goods along with the GST and excludes the exempt supply, if any.
The Stragetic Benefits of The E-Way Bill System:
- Reduction of tax evasion and unthical practices prevalent.
- Homogenization of the logistics system in all of India.
- Traceability and control over merchandise from origin to its ultimate destination.
- Elimination of various indirect taxes by the introduction of a single universal, One Nation One Tax.
- Easier control of supply of goods for the Government and taxation authorities.
- More control of logistic operation for all parties involved: suppliers, recipients and logistics operators.
- A universal taxation system to keep a record of transactions taking place for the the consignment value exceeding the mentioned threshold limits (Rs. 50,000/-).
- Faster and hassel free processes by building a systematic and stragetic framework.
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