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.
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
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.
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.
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.)