Earlier, in India, there were several indirect taxes such as excise duty, customs duty, service tax, etc. However, this system was changed after the introduction of a unified indirect tax system that combines a large number of central and state indirect taxes under a single GST.
GST, or Goods and Services Tax, is a tax imposed at the national level on the production, consumption, and sale of goods and services. It is a single domestic indirect tax that is applicable all over India.
For more, we have a separate law note that tells you about GST, GST Council, and its after-impact. In this article, we will help you understand the types of GST, the difference between GST and the previous taxation law, how to apply for it, and its applicability to advocates and legal services.
How Did the Concept of GST Come to India?
The idea of GST was first proposed in India in the year 2000 by the then Prime Minister, Atal Bihari Vajpayee. A committee was then established to develop the GST structure and draft the GST law in the country. In 2004, the task force, which was formed in 2003 for fiscal responsibility and budget management, recommended the implementation of the GST.
Later, in 2006, the then Finance Minister of India, Jaswant Singh, introduced the GST in his budget speech for 2006-2007. The Constitution Amendment Bill was introduced in 2011 to make the GST law.
Finally, in 2017, the GST Bill was passed by both the Houses of Parliament, and the GST law came into force on 1st April 2017.
Types of GST
Three types of taxes come under the purview of GST.
CGST stands for Central Goods and Services Taxes. It is collected by the central government. It is levied on the intra-state supply or sale of goods and services. CGST can be altered by the experts administered by the central government.
SGST stands for State Goods and Services Taxes. Although the central government oversees and controls the governing structure of the state, the SGST is collected by the state government. It is levied on the intra-state supply or sale of goods and services.
In other words, similar to CGST, SGST is also applied to the intra-state supply or sale of goods and services, but it is governed by the state government.
IGST stands for Integrated Goods and Services Taxes. It is collected by the central government. It is levied on the inter-state supply or sale of goods and services.
Difference Between GST and the Previous Taxation Law in India
There are notable differences between the GST and the taxation system that India had before:
- Taxes like customs duty and central sales tax existed in India under the previous taxation system. But, under GST, except for petroleum, natural gas, and high-speed diesel, all central and state taxes are merged, and a single tax is charged on all goods and services.
- Earlier, taxes were imposed either where the commodities were made or where the services were provided. On the other hand, taxes are imposed at the point of consumption under the current taxation system, i.e. GST.
- Previously, the central excise and service tax were similar, but the VAT varied from state to state. The process is, however, the same under the GST system.
- The registration process was operated under central and state administrations under India’s prior taxation system. However, the GST includes a mechanism for electronic registration based on the entity’s PAN.
How to Apply for GST
In order to sell something in India, a person must be registered for GST except for the things that come under the exempted categories. The following organisations and people are required to register for the Goods and Services Tax:
- Online store organisation
- Individuals who participate in e-commerce organisations as suppliers
- People who use the reverse change technique to pay their taxes
- Agents for input service providers and distributors
- People who are not residents but pay taxes
- Businesses with annual revenues that exceed the threshold
- People who registered before the GST law was implemented
Here is the procedure for registration of GST:
- You must first visit the official GST webpage.
- After that, on the registration page, provide all the necessary information, like PAN number, email address, phone number, etc.
- After entering the information, you will receive two OTPs, one on your email and the other on your mobile device.
- Enter the OTP to verify your phone number and email id.
- A temporary reference will be generated. Enter the generated temporary reference number in the TRN (Temporary Reference Number) field.
- A verification of OTP will be asked again. You will be directed to the “My Saved Application” page after verifying it.
- Complete the form’s fields and submit it within 15 days.
- There are ten tabs or sections on this form. You will require scanned copies of your current bank account number, IFSC, and proof of the formation of business for this process. The following records are required in addition to the certificate of registration:
- Photograph of the promoter
- The principal location of the business
- Evidence of the appointment of authorised signatory
- A picture of the authorised signer
- Proceed to part III after all of the documents have been submitted. You will have to choose to submit the application by selecting one of the following options for verification:
- Electronic signature verification
- Verification with the EVC
- Verification with DSC
Applicability of GST on Advocates and Legal Services
Legal services include representational services in any court or tribunal as well as consulting or help in any area of law offered by attorneys or advocates.
GST applies to legal services provided by the advocates. However, under certain circumstances, GST does not apply to legal services. The exemptions for providing legal services to advocates, senior advocates, and firms of advocates are listed below:
- Services provided by an individual advocate or firm are exempted from GST if it is provided to a sole advocate or any firm of advocates, a senior advocate, a business entity that qualifies for a registration exemption under the CGST Act of 2017, any agency of the government and non-commercial entity.
- Senior advocates are exempted from GST if such services are provided to a business entity that qualifies for a registration exemption under the CGST Act of 2017, any agency of the government and a non-commercial entity.
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