What is GST? GST Full Form & GST Explained by CAs & Lawyers

Among other GST bill news, the GST tax laws were passed and now it is ready to be implemented in India. For those who are new, GST full form is Goods and Services Tax. We have two of India’s best Chartered Accountants and Lawyers answer all the doubts. You can also go through a quick GST Bill pros and cons ppt. Let’s take you through everything, how and what do you need to do:

What is GST?

According to Mr. Karan Batra from charteredclub.com who is a rank 22 holder in CA in India:

GST stands for Goods and Services Tax and this will replace all the various indirect taxes (like Service Tax, VAT etc) currently applicable in India (except Customs).

– CA Karan Batra, Founder charteredclub.com

Instead of various different taxes being levied – only one tax would be levied i.e. GST. Moreover, the same laws would now be applicable across India as compared to the different laws prevalent currently.

Here is how Mr. Nitish Banka, Supreme Court Advocate and Founder of lexspeak.in explains GST:

Since the beginning of Indian constitution, separate taxes for separate purposes have existed. Presently, there are many indirect taxes like VAT(Value Added Tax), Service tax etc .The rate of these taxes vary from State to State. These taxes are applicable to the goods and services in India. After the introduction of GST only single tax will be levy on goods and services with uniform rate throughout the country.
GST will make India single market economy.
– Advocate Nitish Banka, Founder lexspeak.in

What is the GST registration Process that one has to Follow?

CA Karan tells us that businesses would be required to apply for GST Registration online. You would be required to mention a provisional ID which would come from the existing company registration documents (if any). The next step will be to complete the information and upload the documents on the above mentioned website.

 

Advocate Nitish further explains:

Since GST will be implemented tentatively from 1st April 2017, the Government of India has made requisite provisions for migration from existing taxpayers of old tax system(VAT, Service Tax etc) to the new GST. For this, they first have to enroll themselves into GSTN. Here is the process that one has to follow for GST Registration:

  1. Go to portal  https://www.gst.gov.in/
  2. If you are an existing tax payer and want to be registered under the GST scheme then State governments will have provided you with provisional user name and password for enrollments into GST network and you may use this to fill a registration form on https://www.gst.gov.in/ and you will be enrolled in GSTN and you will be getting provisional certificate after 6 months and after verification of documents the certificate will be confirmed Note-: State VAT and Central Excise registered taxpayers are getting enrolled first and for service tax the dates of enrollment will be notified.
  3. These are the documents required
S.No. Documents File Size Format Maximum Allowable Size
1. Proof of Constitution of Business

  • In case of Partnership firm: Partnership Deed of Partnership Firm (PDF and JPEG format in maximum size of 1 MB)
  • In case of Others: Registration Certificate of the Business Entity
PDF or JPEG 1 MB
2. Photograph of Promoters/ Partners/ Karta of HUF JPEG 100 KB
3. Proof of Appointment of Authorized Signatory PDF or JPEG 1 MB
4. Photograph of Authorized Signatory JPEG 100 KB
5. Opening page of Bank Passbook/ Statement containing Bank Account Number of < Account Number>, Address of Branch,

Address of Account holder and few transaction details

PDF and JPEG 1 MB

More information on https://www.gst.gov.in/help/faq/

Will GST be Beneficial for Startups?

We asked CA Karan and Advocate Nitish about the impact of GST news on Startups. Here below are their opinions on the same:

CA Karan Batra: Yes, GST would be beneficial to start-ups as it would eradicate many complications and bring more clarity into the law. Moreover, with the same law being applicable across India, it would make easier for startups to operate anywhere in India. This will also aid them in expansion into different cities without worrying about separate taxation laws.

There may be some initial hiccups in GST Implementation but in the long run – it is going to be highly fruitful for startups & business alike.

– CA Karan Batra, Founder charteredclub.com

 

Advocate Nitish Banka: Yes, GST will be beneficial especially for those startups who have presence in multiple States of India.

Reasons:

  • Easy compliance- GST will offer online compliance,before the Goods & Services Tax one had to do multiple documentation for multiple taxes. Thereby also facilitating ease of doing business.
  • Uniform Rate- Now Startups will not have to worry about indirect taxes as single rate will be applicable irrespective of the State it functions.
  • Make manufacturing and services cheaper- Complex  & multiple taxes will be removed by the introduction of GST. As a result of which overall taxation on goods and services will bound to be removed. This will facilitate greater efficiency for manufacturers and service providers. It will also ensure cheaper goods and services for the consumer.

 

Now Startups will not have to worry about indirect taxes as single rate will be applicable irrespective of the State it functions.

– Advocate Nitish Banka, Founder lexspeak.in

 

Will GST Implementation Complicate or Ease Funding scenario in India?

CA Karan Batra: 

GST Implementation will ease the funding scenario because of the fact that it would provide more clarity regarding taxes both to the business owners as well as the Investors. Legal and Tax Regulations in the Country are major factors which all domestic and foreign investors take into account while investing.

However, it is pertinent to note here that the legal and Tax Regulations are not the only things that matter. There are several other factors which also matter and currently it is these factors which seem to be playing a spoil-sport.

Advocate Nitish Banka: Right now, India ranks 130 out of 189 countries in the ease of doing business parameter. With GST and Startup India scheme both combined, this index is surely going to improve. The new tax rule indirectly will help in improving the funding scenario and making businesses more competitive.

Here were excerpts of our conversation with CA Karan Batra and Advocate Nitish Banka regarding GST and its impact on startups. While most professionals in the industry are positive about the move, only time will tell its repercussions. However, GST is definitely being seen as an avenue for more foreign investment due to ease of taxation. The new tax rule is also expected to help startups expand and deliver goods across borders without bothering about separate tax rules in different states of the country.

We hope we had GST Explained for you as you wished to understand. We’d be glad to know if you have any other views. Furthermore, Feel free to write any tips to editor@coworkingindiamag.com


Rutavi Bhatia

Author at Coworking India Magazine. I love writing about entrepreneurship, innovation and technology.

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