Tips for accurately calculating and paying GST

 


1. Find the GST Rate applicable to the product or Service

For calculating GST filing online To calculate GST, it is first necessary to figure out the rate that is applicable in the GST Act. The past month has seen the Council has released GST rates for almost every item and service in India.

HSN Code as well as SAC Code.

To determine the rate applicable to determine the applicable Rate, you must distinguish between the types of supply. Find out if it's services or goods? If the source is a service then it's crucial to determine HSN Code. HSN Code applicable for the items. HSN Code is an internationally recognized system of classification for all kinds of goods in international transactions.

One must check one must verify the SAC Code if the transaction is involving the sale of the service. SAC Code stands for Service Accounting Codes and is used to classify all services that fall under GST. It is imposed under five different slab rates of NIL 5 percent and 12%, 18 percent, and 28 percent for both goods as well as services.

2. Determine the applicability for IGST as well as CGST and SGST

Once you know the rate applicable Then the applicability to IGST and CGST and SGST is to be assessed. To determine if IGST as well as CGST and SGST could be used you must identify the source of supply.

file gst return online

The location of supply will be the location of delivery of goods or of services. The determination of the location of supply is a more complicated problem for other supplies that involve E-Commerce.

  • Inter-State Supply If services or goods are offered interstate, then IGST is applicable to the transaction. If any provider engages in offering an inter-state supply, registration of the supplier is mandatory.
  • Intra-State supply: If the supplier delivers the product or service in the state of origin. In that case, CGST as well as Central Goods and Services Tax and SGST or State Goods and Service Tax is applicable.

In the calculation IGST, CGST and SGST

  • If IGST is in effect and the tax amount has to be counted in accordance with IGST.
  • When the purchase is within state The tax will be split in CGST as well as SGST.
  • The calculation of IGST, CGST, or SGST is just to determine classification. It's for crediting tax revenue to the states of consumption. The tax rate remains the same and there is not a double taxation.

3. Reverse Charge Basis

Usually, the provider is expected to collect taxes and then remit it to the government. However, the person receiving the service will be held accountable if the service offered to the customer are classified as reverse charge services. Therefore, the customer and the service provider must know whether the transactions have to do with reverse charge or not.

4. Incorporation into the The Composition Scheme by Suppliers

Typically, compliance requires the provider to keep extensive documents, accounts and files 3 returns per month, using GSTR-1, GSTR-2A , and GSTR-3B. However the majority of SMEs in India might find compliance process difficult and would need a more simple process. Companies with a total turnover not exceeding Rs.75 lakhs can be enrolled in GST Composition Scheme. GST Composition Scheme and pay an amount of GST depending on their total revenue.

Suppliers who are enrolled under the GST Composition Scheme have to submit proper documentation confirming the acknowledgement as composition suppliers which means they are not eligible to claim tax. So, prior to completing any transaction is made, customer must verify whether the supplier was registered under GST Composition Scheme or not.

5. Decide the Type of Transaction

Under GST tax, transactions can be broadly classified into three categories:

  • B2B. (B2B): In order for an item to be classified as a B2B business transaction under GST and to be eligible to GST in-tax credit both the provider and the purchaser of the item or service must be registered with an GSTIN.
  • B2C: Business to consumer (B2C) in the case of a B2C transaction that is subject to GST the person who receives the product or service is not qualified to receive the credit for input tax.

In the case of a B2C deal, the buyer is not required to provide information about their GSTIN or GST registration. If the value of the transaction is higher than Rs.2.5 lakhs, the customer must provide information such as name, address and other information to establish the location of supply.


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