The introduction of the term GST in 2017 led to replacement of seventeen taxes in India. When the Parliament came up with Goods and Services Tax, there was a lot of opposition since people were not ready to bring GST in India. First Bill was introduced by the then Finance Minister, Shri Arun Jaitley in Lok Sabha in 2015, but GST was implemented in India from 1 July 2017. Goods and Services Tax is one of the Indirect Taxes. As we know, after the abolition of article 370, Jammu and Kashmir is also a part of India. Thus, GST was introduced in Jammu and Kashmir on 8 July 2017.
GST Terms Simplified
1. Indirect Tax
Indirect taxes are those taxes which are imposed on the way to consumers in a universal form through the intermediary. The best example of Indirect tax is GST and Customs. Since, the price of goods and services are already included in the tax, the customer does not feel the direct burden while paying the Indirect tax. Thus, we can say that Indirect tax is collected indirectly by the consumers. The nature of indirect tax is regressive i.e same for all the customers.
2. GST Introduction
GST refers to Goods and Services Tax. It was introduced with the slogan of ‘ONE NATION ONE TAX’ in India. The concept of GST was introduced for the first time in France in 1954.
Broad principles of GST are,
a) It is a broad-based tax
b) Destination based tax
c) Paid by supplier
d) Tax on consumption of goods.
3. GST Council
GST council is the Apex body in the GST matters. It is a constitutional body. All the decisions under the GST Law are taken by the GST Council through their meetings. Thus, it is also called the Tax Administration Authority.
Also check Common Income Tax Terms
4. GST Portal
It is simply the government website where the registered person can find all the information like all the laws, notifications and amendments, GST E-invoicing, making of E-way Bills, GST returns filing, etc.. The overall control of GST website goes by the government and it is easy to access. It is a 24×7 service by the government since it is an online platform.
5. Goods
The term goods is defined under Section 2(52) of the CGST Act 2017. As per the GST laws, goods are the backbone in GST, and without goods GST is useless. As per the definition given under the Central Goods and Services Act 2017,the term goods means “movable property (every kind) but it does not include Money and securities.”
As per the definitions of goods, actionable claim, growing crops and things attached to earth are also included.
6. Services
The term services has been defined in a very broad manner, and it means anything. Thus, we can say that, Services is anything as per the first word of the definition. But when we read the definition so far then it is mentioned in the definition itself that goods, money and securities do not fall under the definition of services. The term service also includes the activities which are relating to the use of money or cash conversion or any other mode prescribed by the lawmakers. Example – making of demand draft by the cheque also falls under the definition of services as per the law.
7. Supply
Supply is the most critical term in the GST law. Without this term, GST law is incomplete. Taxable event in GST law is Supply, whether in form of goods or in form of services. Examples of supply under GST are Supply of goods by overseas suppliers to Indian buyers – it would be taxable as supply- interstate supply. The scope of supply has been provided under Section 7 of CGST Act 2017. There are two types of supply: Intra state supply and Inter-State supply.
The term Intra-State supply is the supply which is where the location of supplier and place of supply is within the same State. For Example, if A sells the goods to B at Delhi to Delhi. Thus, within the same state, thus, Intra state supply is attracted. Whereas, the Inter State supply means where the location of supplier is different State or SEZ, or any other country then the Inter State supply will be attracted. For example: where X sells the Goods from Haryana to Delhi to Y, in this case it falls under the concept of Inter-State supply.
8. Capital Goods
The capital goods are defined under Section 2(19) of CGST Act 2017. It means the goods of the value which is capitalized in the books of account of the person and person itself claim the ITC (Input Tax Credit) and used for his intention to be used in the course or furtherance of the business.
9. Casual Taxable Person
The concept of casual taxable person is the one which is used for when the person occasionally comes to India to run their business and creates principal and agents or in any other capacity in any state or union territory. Their place of business has not been fixed. Examples of this casual taxable person could be those who have set up their stalls at Suraj-Kund Crafts Mela, Trade Fair etc.
10. E-Way Bill
E-way bill is made electronically when there is movement of goods. This bill is generated on the portal named GSTN Portal. The requirement of e-way bill arises when there is movement of goods worth more than 50,000 (Fifty thousand) in value. This requirement is necessary where the person is registered under the GST law.
11. Input Tax Credit
The term input tax credit, used in GST, is very popular. It is the credit which can be used by the registered persons for tax paid on the goods and services and also used inputs in the course of business. ITC or Input Tax credit is considered as the cornerstone, blood and backbone of GST. This concept was introduced for the seamless flow of credit throughout the value chain which reduces the cascading effect of tax. The minimum eligibility to avail ITC is that a person should be registered under the GST and avail this only for the purpose of Business. An unregistered person and the person who is using the goods for personal purpose are not eligible to take the benefit of the ITC.
12. Job Work
The concept of job work has been defined under Section 2(68) of CGST Act 2017. It means the undertaking belonging from one person to another registered person for the purpose of treatment or process by person of goods. The person who is treating or processing the goods belonging to another person is called a Job Worker.
13. Registered Person
It means a person who is registered under GST law. The responsibility of the registered person shall increase like, file returns as per GST law, maintain books of accounts and so on.
14. Credit Note and Debit Note
It is not uncommon to hear that a tax invoice is issued by the registered person in GST. Debit Note or Credit Note is a part of tax invoice. The concept of Debit Note or Credit Note is crucial. If we talk about the credit note, it means when the value or tax charged in tax invoice is found to exceed the taxable value or tax in respect of Movement involved in goods. Then the customer issues the Credit note invoice to the recipient. Whereas, when the taxable value or tax charged in that tax invoice is found less than the taxable value or tax payable in respect of such supply, a debit note is issued.
The recommended GST Terms have been explained by Advocate Aakash Poddar, who is interning at Lawgical Shots and assisting the team to bring the most informational and valuable legal blogs for the legal fraternity.
