Jharna Majee*
The Goods and Service Tax (GST) is nothing but a single tax which combines all separate taxes in the central or state level. Before the advent of GST in the Indian economy, there were 17 different types of indirect taxes of central and state governments. Now all these taxes have been abolished and combined in a single form of tax that is GST. In this column, we will give you a beginner’s guide to Brief history of GST, how GST works, what is GSTIN number and how to get your GSTIN number, and different GST rates of various goods or services.
What is GSTIN Number?
Just like PAN card, Goods and services Tax Identification Number i.e., GSTIN is a set of digits including English alphabets and numbers.
Let’s make it clear with an example, just look at the following GSTIN number
- The first two digits represent the state code. The state code is the same as they were in the Census list of 2011. Obviously, the state code will be different for the different state. The state code for Karnataka is 29, the state code of Maharashtra is 27.
- The Next ten digits are the PAN of the respective person who runs the shop or any firm or any business or provides any kind of services.
- The thirteenth digit is assigned on the basis of the number of registration within the state. Here, in the above-mentioned case, it is 5.
- The fourteenth digit is fixed for everyone and every case. It is denoted by Z as default.
- The last i.e., the fifteenth one is for check code to detect any error. It may be an English alphabet or a number.
How to get GSTIN Number?
First of all know clearly that you can get a GSTIN number by online only. You can apply online and there is no provision to get this offline by any means. So, to get GSTIN Number, follow the steps.
- Go to the Online GST portal gst.gov.in
- Go to Register Now. Then fill in Part A of the application with your name, address, E-mail Id, and a registered mobile number.
- The portal will verify your details and send you one-time password (OTP) to your mail as well as mobile number as provided by you earlier.
Once you submit the OTP, your verification is now completed. The system will provide you with an Application Reference Number i.e., ARN via your registered mobile number and e-mail id.
Now, you need to fill Part B of the application using the ARN. The scanned copies of the following documents are to be uploaded in the GST portal.
- Passport size photograph,
- Taxpayer counterfoil,
- Proof of place of business. In case you are running your business in a rental property, you need to upload No objection Certificate from the owner of the property.
- Bank account details i.e., account number, the name of the account holder, IFSC code, Bank Branch etc.
- Authorization form.
GST RATES
The apex body of the GST is GST council. The GST council divided the whole indirect taxation into five different tax categories. The five tax brackets are as follows:
Tax bracket 0%: No tax will be imposed on items like jute, fresh meat, fish, chicken, eggs, fresh fruits and vegetables, salt, Bindi, Sindoor etc. Services like Hotels and lodges with tariff below Rs. 1,000/-.
Tax bracket 5%: Items like apparel below Rs. 1,000/-, footwear below Rs. 500/- Frozen Vegetables, tea, coffee, spices, pizza, bread, kerosene, coal, medicines etc. All restaurants, restaurants of hotels with room tariff less than Rs. 7500/-, food parcels, textile job work, transport services.
Tax bracket 12%: Apparel above Rs. 1,000/-, frozen meat products, butter, cheese, ghee, dry foods in packaged form, cell phones, Ketchup & sauces, marble idols, table, and kitchenware etc. Services like state-run lotteries, Non-AC hotels, business class air ticket, fertilizers.
Tax bracket 18%: Footwear costing more than Rs. 500/-, biscuits (all categories), cakes, preserved vegetables, software,jams, raincoats, furniture, computer monitors, printers, camera, speakers, detergents, fans, slabs of marbles and granite, Wristwatches, razor and razor blades, all musical instruments and their parts, CCTV, tractor parts, aircraft engines. Services like restaurants in hotel premises having room tariff of Rs. 7500/- and above, telecom service, IT services, Branded garments, and financial services (Shares, Mutual Fund, bond, Health Insurance).
Tax bracket 28%: In total 50 luxury and sin products like Bidis, cigarette, Pan masala, paint, sunscreen, ceramic tiles, washing machine, AC, vacuum cleaner, automobiles, motorcycles, aircraft for personal use etc. Services like private-run lotteries authorized by the states, cinema. In addition to 28% tax, a surcharge of 14% is charged.
*(Author Jharna Majee is an Equity Fundamental Analyst and the founder of Capitalante.com where Author shares her learning of Stock market, Mutual funds, Insurance, Financial Planning, Tax Planning, etc.)
