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GST

GST Portal Login – a complete guide.

gst portal login, gst login
GST portal login

Table of Contents

What is the Government’s GST portal?

One of the options that produce the Goods and Service Tax regime a real winner is that currently, tax management comes with technological support through GST portal login. Now, you can avail of tax services online to file GST, read credit ledgers, or claim tax refunds in place of excess tax paid. The primary step of having the ability to try this is, to login into the Govt. of India’s official Goods and Service Tax login portal hosted at www.gst.gov.in. Here’s a summary of the GST portal login procedure for existing and first-time users on the GST portal.

What is the GST E-method Bill System?

Electronic method Bill, the eWay Bill is a unique document/bill that transporters have to carry once moving product from one state to a different or for intra-state movement. The eWay bill is to trace the product’s movement under the Goods and Service Tax.

It is generated on the eWay portal. The eWay bill should be generated for each consignment of products of value of Rs. 50,000 and more.

When an associate eWay bill is generated, a singular eWay Bill variety is allotted to the transporter, recipient, and provider.

Required details or documents to get the associate eWaybill:

  1. Firstly, we need Invoice/bill of supply/challan of the consignment of products.
  2. Secondly, we need transporter ID or vehicle variety, if we transport consignment by road.
  3. Lastly, we need transporter ID, transport document variety, and date on the document, if we transport consignment by rail, air, or ship.

Before GST implementation method, bills were generated through state-specific portals and were subject to state rules; however, after GST, the eWay bill is ruled by a consistent set of rules applicable to through-out India.

How to register for GST?

  • To register for GST online, visit https://www.gst.gov.in and click on  ‘New Registration’ listed below the ‘Services’ tab. 
  • Before clicking on ‘Proceed’ Enter details like personal profile type, business name, state, email ID, and mobile number and so on.
  • Use the OTP you get on your mobile and email ID to come up with your Temporary Reference Range (TRN).

  • Click on ‘New Registration’ once more and use your TRN at this point.
  • Via the ‘Verification’ tab edit your application, transfer documents, enter details, and submit your application

  • Use the GST Application Reference range that you just get to examine the standing of your application within the future.

GST portal login procedure for first-time user

  • Visit https://www.gst.gov.in and click on on the ‘Login’ button at the top right-hand corner of your screen.
  • On the login page, click on the word ‘here’ that you just can notice within the line: 1st-time login: If you work certain the primary time, click here to login.
  • Enter your probationary ID/GSTIN/UIN and password as received via email.
  • Enter the new username and password that you just would like to use in future and click on ‘Submit.
  • Go back to the login page, and log in with your new credentials.

Moreover, the ability to pay GST online, which is necessary for businesses with turnovers surpassing the turnover limit, saves time and helps you specialize in different aspects of your SME venture.

GST portal login procedure for existing user

  • Visit the GST portal in India, and click on the ‘Login’ button at the top right-hand corner of your screen.
  • Enter your username, password, and the captcha code, and click on ‘Login’ again.
  • The GST portal login procedure is now complete. And the page that follows gives you access to your dashboard.
Categories
GST

How to Calculate GST? GST (Goods and Service Tax) Guide 101?

Table of Contents

How to calculate GST?

Implemented in 2017 with an aim to simplify the burdened taxation system of India, Goods and Services Tax is one of the most significant indirect tax reforms enacted in any democratic country in the world. Before this tax, goods and services were under various taxes such as excise, VAT, state government tax, and more. The overall process was very complex and lengthy. The government came up with the ‘one nation, one tax’ initiative which was first suggested by Asim Dasgupta Committee in 2011. 

The taxation system simplification went through multiple rounds of amendments and updates to make it customer-centric and hassle-free.

Types of GST collections

  • SGST (State Goods and Services Tax): Replaced VAT, Sales tax, Entry tax, Entertainment tax and more.
  • CGST (Central Goods and Services Tax): Replaced CST, SAD, State-tax and more.
  • UTGST (Union Territory Goods and Services Tax): Applicable for goods and services in Indian union territories.
  • IGST (Integrated Goods and Services Tax): Applicable on inter-state transaction of goods and services.

For Goods and Service Providers:

How to Calculate GST on goods and services?

The overall process for Goods and Services Tax calculation is relatively easy as different Goods and Services are segregated into different slab rates according to which taxes are calculated. Check the below steps to know the complete calculating process:

STEP 1: How to Calculate GST Percentage?

Determining the GST slab is the first step of determining the Goods and Services Tax amount associated with your service and goods. The Goods and Services Tax council has uploaded a complete list of details regarding the GST slabs of different goods and services. You can find the list here: http://www.gstcouncil.gov.in/uploaded-pdf-file-under-gst-rates

Meanwhile, some of the major Goods and Services Tax slab rates are presented in the below table.

Slab RateGoods and Services
5%Aircraft MRO, newspaper printing, fertilizers, plastic waste
12%Mobile phones and parts, handmade matches, temporary basis IP rights, building constructions for sale, packed fruits, nuts
18%Outdoor catering, IT services, telecom services, washing machine, camera, freelancing services
28%Cinema, AC 5=Star hotel stay, sunscreen, motorcycles, cars

NOTE: Goods and Services Tax Council frequently revises the goods and services tax slabs. Check the official notification to know the present tax rate

STEP 2: How to Calculate GST Payable?

Once you know the tax slabs applicable on your goods & services, it’s time to calculate the GST payable on that goods & services. This is where you can find the beauty of the tax simplification of GST. The formula for calculating GST payable is given below.

  • GST Payable: (Original Cost Price) x (% GST Rate)/100
  • Net Price to the Buyer: Original Cost Price + GST Payable

Different tax rates were charged at the manufacturer, retailer, and customer end, leading to a complex taxation mechanism and high price in the earlier taxation process. The central government used to charge excise duty at the manufacturing factories while the state government charged VAT. Under Goods and Services Tax, the taxes are charged only at the consumer end, saving hassle in the intermediate production levels. Since the goods & services were fixed under a particular tax slab, prices of many goods came down, which provided a huge relief to the consumers.

Prices of regular commodities such as soaps, shampoos, toothpaste, and milk powder came down drastically. Goods and Services Tax also has exempted many essential commodities from tax, such as wheat and rice. Let’s check some examples of Goods and Services Tax calculation.

Example 1: For Goods

ParticularsRate Amount (INR)
Cost Price of Good100000100000
Profit WantedProfit -10%10000
Total110000
CGST6%6600
SGST6%6600
Net Amount (To Buyer)123200

Example 2: For Services

ParticularsRate Amount (INR)
Freelancing Service100000
Total100000
GST%18000
Net Amount (To Buyer)118000

NOTE: Freelancers with turnover exceeding 20 lakhs in a year are mandatory required to register for Goods and Services Tax

For Customers

This section of the blog is dedicated to the consumers and final buyers who are paying the net price to the goods & service providers.

Understanding GST Inclusive & GST Exclusive Amount:

  • Goods and Services Tax Inclusive: The net amount is payable to the goods & service providers that includes the GST portion and the cost price. You don’t need to pay anything extra over this price.
  • Goods and Services Tax Exclusive: The cost price of the goods & services includes the manufacturer/ service provider’s profit margin. Hence, remain aware that it is not the final price as the GST tax would be applied on it before the final purchase.

Removing Goods and Services Tax from the Base Price: 

  • GST Amount = Base Cost Price – [Original Cost x {100/ (100+GST %)}]
  • Net Price: Base Cost Price – GST Amount

NOTE: Be a rational and educated consumer. Never pay anything more than the MRP price because it includes the Goods and Services Tax portion in it. It is not calculated over the MRP price listed on the goods.

Frequently Asked Questions:

  1. How is Goods and Service calculated?

GST is calculated based on the tax slab that accompanies that particular goods & service and the tax rate is added to the base price to calculate the net payable amount.

  1. What are the different tax slabs in the GST?

There are four broad divisions of tax slabs which are 5%, 12%, 18% and 28%. The GST council is planning to simplify these four slabs and make lesser and uniform tax slabs.

  1. Do I need to pay Goods and Services Tax on MRP also?

Remember that MRP price is inclusive of GST taxes, and you don’t need to pay an extra amount on MRP in the name of taxes.

  1. Which tax slab is applicable to my service?

You need to consult a financial expert to find out all the information regarding your tax structure and you can contact us for the same.

  1. How can I file my GST?

You need to register for the GST on the portal and generate your unique GSTIN number, and you can also consult a financial expert for more guidance.

Categories
GST

GST – Meaning, Advantage, and Component of Goods and Service Tax.

The full form of GST is “Goods and Service Tax“. The journey of GST in India began in 2000 when the government set up a panel for drafting the law. It took 17 years for the law to evolve, and was finally implemented on 1st July 2017. Now let’s see what is the meaning of GST.

Table of Contents

What is the meaning of GST?

First and foremost, it is essential to know the meaning of GST. It is a multi-stage indirect taxation system where tax is levied at every value addition that goods and service go through. In other words, tax is applicable at every point of sales, such as raw material purchase, manufacture or production, warehousing finished goods, sale of the product to a wholesaler, sale to retailer, and final sale to the consumer.

Who introduced Goods and Service Tax in India?

Prime Minister Narendra Modi launched Goods and Service Tax into operation on the midnight of 1st July 2017. But it was almost two decades in the making since the concept was first proposed under the Atal Bihari Vajpayee government.

How does the Goods and Service Tax System work?

Let us understand how Goods and Service Tax works.

Stage 1: The Manufacturer

Let us consider a shirt manufacturer that buys raw material worth 1000 INR and 60 INR tax. He added the value of 300 INR to manufacture the shirt. Now the total value of the shirt became 1300 (1000+300). Assuming the GST rate on the shirt be 5%, that will be 65 INR. This applicable GST amount (65 INR) can be set off by the manufacturer against the tax paid by him on the raw material i.e., 60 INR. Hence the effective Goods and Service Tax rate applicable will be only 5 INR (65-60). This makes GST a value-added tax.

Stage 2: Distributor or Service Provider

The next stage is where the goods are given to the distributor. The distributor buys the same shirt for 1300 INR and adds on the value to that shirt of around 200 INR. Now the value of the shirt will be 1,500, that is (1300+200). Under the Goods and Service Tax, he will need to pay the tax around 75 INR (5%), which again can be set off against the tax on the purchased shirt from the manufacturer that is 65 INR. Now the actual tax incidence under GST on the distributor will be 75-65= 10 INR.

Stage 3: Retailer

At this stage, the retailer gets the goods from the wholesaler or service provider. Now the retailer adds a margin of 100 INR on the purchase of a shirt. The total cost of the product will become 1600 INR (1500 + 100). Under GST, he will now need to pay tax (assuming a 5% rate of GST) that will become 80 INR that can be set off by him against 75 INR tax paid by wholesaler. Now the tax incidence under GST on the retailer will be 5 INR (80-75).

Stage 4: End Consumer

This amount of 1600 INR is paid by the end consumer purchasing this shirt.

Through the above examples given, We can conclude that Goods and Service Tax is a value-added tax that provides benefits of an input tax credit on every stage, excluding the end consumer stage. Hence, we can say that GST is one nation one tax providing economic freedom to the traders.

Advantages Of GST

GST has mainly removed the cascading effect on the sale of goods and service. Thus removal of the cascading effect has impacted the cost of goods. Since the GST regime eliminates the tax on tax, the cost of goods decreases.

Below are few advantages of Goods and Service Tax

  • Removes the cascading effect of tax.
  • Higher threshold for GST registration.
  • Composition scheme for small businesses.
  • Simpler online facility for GST compliance.
  • Relatively lesser compliances under GST.
  • Defined treatment for e-Commerce activities.
  • Increased efficiency in logistics.
  • Regulating and unorganized sectors.

Component of the Goods and Service Tax

There are three taxes applicable under the Goods and Service Tax system: CGST, SGST, and IGST.

  1. CGST: It is the tax collected by the Central Government on an intra-state sale, i.e. sale happening within a state.
  2. SGST: It is the tax collected by the state government on an intra-state sale, i.e. sale happening within a state.
  3. IGST: If goods or service are provided within two states, i.e., from one state to another, then IGST or Integrated Goods and Service Tax is applicable on the transaction.

Categories
GST

GST State Code List – Everything You Need to Know

As you may know, GST is a tax shared by the state and the central government. And the advanced technology and infrastructure have facilitated inter-state transactions significantly. So, it is essential to classify the place of supply to allocate the GST appropriately. To do the same, every state and UT is allotted a unique GST State Code.

In this article, you will get to know the GST codes for all the states. Let’s start.

Table of Contents

What is GST State Code?

As per the GSTIN format, the first two digits represent the GST State Code, where the business entity is registered. While moving towards Goods and Service Tax registration or going for new GST registration, most businesses would receive a 15 digit GSTIN (Goods and Services Tax Identification Number).

Knowing the GSTIN format is crucial for a business – to ensure that one’s suppliers have quoted the correct GSTIN in their invoices, and ensure that one mentions their own GSTIN correctly in invoices to customers – as the input tax credit depends on this due diligence.

GST Number Format

The 15 digit GSTIN ID is a unique alphanumeric number that comprises of –

  1. First, two digits signify the GST State Code.
  2. The next ten-digit signify the PAN number of the entity.
  3. The next digit indicates the number of registrations an entity has within a state for the same PAN.
  4. And next 14th digit is of no use currently. Therefore will be “Z” by default.
  5. And the last digit is the checksum value. It will be used for error detection.

GST State Code List

Here is the complete list of the respective GST State Codes in India:

Sr. No.NAMESTATE CODE
1.JAMMU AND KASHMIR1
2.HIMACHAL PRADESH2
3.PUNJAB3
4.CHANDIGARH4
5.UTTARAKHAND5
6.HARYANA6
7.DELHI7
8.RAJASTHAN8
9.UTTAR PRADESH9
10.BIHAR10
11.SIKKIM11
12.ARUNACHAL PRADESH12
13.NAGALAND13
14.MANIPUR14
15.MIZORAM15
16.TRIPURA16
17.MEGHALAYA17
18.ASSAM18
19.WEST BENGAL19
20.JHARKHAND20
21.ODISHA21
22.CHATTISGARH22
23.MADHYA PRADESH23
24.GUJARAT24
25.DADRA AND NAGAR HAVELI
AND DAMAN AND DIU (NEWLY MERGED UT)
26
26.MAHARASHTRA27
27.ANDHRA PRADESH (BEFORE DIVISION)28
28.KARNATAKA29
29.GOA30
30.LAKSHWADEEP31
31.KERALA32
32.TAMIL NADU33
33.PUDUCHERRY34
34.ANDAMAN AND NICOBAR ISLANDS35
35.TELANGANA36
36.ANDHRA PRADESH 37
37.LADAKH38

Know Your GST Jurisdiction

As mentioned above, the Goods and Services Tax is a tax shared by the Central and State governments. So, each of them has its own to solve the confusion among the taxpayers. As the name suggests, the central government controls the central jurisdiction. And the state governments control the respective jurisdiction. According to the CGST circular, the criteria for classification is as follows:

  • 90% of all the taxpayers having the turnover less than Rs 1.5 Crore will be under the state administration. The remaining 10% will fall under the hands of the Central Government.
  • The entities having turnover exceeding Rs 1.5 Crore will be shared equally among both the governments.

Maybe the central government wants more big players under its control. But the classification is done randomly by using Stratified Random Sampling. So, there is no bias among the governments regarding the process. Also, the jurisdiction is subdivided on the basis of the zone, commissionerate, division and, range offices.

How to Know Your GST Jurisdiction?

The CBIC department also has a website dedicated to checking the Jurisdiction. The process of finding your jurisdiction is no rocket science. All you need to do is go to CBIC GST: Know Your Jurisdiction > Select your state, zone, division, and range.

The above process is to find your central jurisdiction. Similarly, you can find the state jurisdiction by visiting the respective site. For example, if you are situated in Delhi, you can find your jurisdiction on the website CGST Delhi Zone.

What’s more, you can even find the state and central jurisdiction on your GST Registration Certificate in the form REG-06.

Key Takeaways

As each state has its unique code, so you will get different GSTIN for branches in various states. What’s more, even the different intra-state branches will have different GST Numbers. So, the transfers between different registered branches will also be treated as a supply of goods and services. Also, remember that the UTs of Dadra and Nagar Haveli and Daman and Diu have been merged. (Looks like the government loves altering the map). So, they have a common Code of 26.

In the end, don’t forget to enter the accurate details while registering yourself on the GST portal. Else, you may have to face a problem to rectify your mistakes.

Frequently Asked Questions (FAQs)

Q1: Can we take 2 GST numbers in states?

Yes, you can take 2 GSTIN for the same state if you carry more than one business. For that, you have to register both businesses under GST. The place which was registered first will have the 13th digit of GSTIN as 1. And the other place will have 2 as the 13th digit of GSTIN.

Q2: How do I find my GST officer?

To find the details, visit GST Portal. Click on Search Taxpayer. Here, you will find different options. Choose any one of them and enter the GSTIN/ PAN. All the relevant details will be shown.

Q3: Can we find GSTIN by name?

No, it is not possible to find the GSTIN of all taxpayers by name. You can find it only if the GSTIN is mentioned on the website of the company. Or the state government has shared the list of the taxpayers. 

Categories
GST

GST Annual Return: A Complete Guide to GST Compliance.

What is GST annual return?

The GSTR 9 is a GST annual return form that must be filed once a year by business taxpayers with all combined information of SGST, CGST, and IGST as charged during the prior year.

In this blog, we summarise all of the information, laws, and regulations for filing GSTR 9 and 9c online, as well as a step-by-step compliance procedure. 

Reading this article, we will learn about how to file GST 9, types of GST return, annual return under GST, and Due Date for GST returns. But before getting into it, let’s understand GST and its benefits.

Table of Contents

What is GST?

The Goods and Services Tax (GST) is a tax on goods and services. It is an indirect tax that has mostly replaced many other indirect taxes in India, such as excise duty, VAT, and services tax. Government of India passed the Goods and Service Tax Act on March 29, 2017. It became operation on July 1, 2017.

What are the Advantages of GST?

GST is primarily technologically focused. All operations, such as GST registration, GST return filing, refund application, and response to the notice, are done online via the GST portal, which speeds up the process.

The cascading impact on the selling of goods and services has mostly been eliminated by the GST. Due to this, the cost of goods has decreased.

Compliance under Goods and Service Tax

The major compliance under GST are as follows.

1. E-way Bills

By introducing “E-way bills,” the GST created a centralized system of waybills. Government of India introduced this framework on April 1, 2018, for inter-state goods movement and on April 15, 2018, for synchronized intra-state goods movement.

Manufacturing companies, distributors, and carriers can quickly produce e-way bills for goods transported from their origin point to the destination point using the e-way bill system. Tax authorities win from this method as well, as this method reduces time spent at checkpoints and aids in facilitating tax avoidance.

2. E-invoicing

For companies with an annual gross turnover of more than Rs.500 crore in any previous financial year, the e-invoicing system became operational on October 1, 2020. (from 2017-18). The Government applied this framework to those with an annual gross income of over Rs.100 crore as of January 1, 2021.

Every B2B invoice must be assigned a unique invoice reference number (IRN) by posting it to the GSTN’s bill registration portal. Then, invoice is verified for accuracy and authenticity by the portal. It then gets authorization with the use of a digital signature and a QR code.

e-Invoicing enables invoice integration and reduces data entry errors. It aims to send invoice information directly from the IRP to the Goods and services tax and eway billing portals. As a result, it will remove the need for manual processing while filing GSTR-1 and generating e-way bills.

3. Annual Return under GST

A GST annual return is a report that a business taxpayer needs to file with the tax administration authorities that contains information about their earnings. Tax officials use this to figure out how much money they owe for taxes.

Depending on the type of company, all registered businesses must file monthly, quarterly, or annual GST returns. The GST site is where all of these online GST filings take place. 

Types of GST Annual Return

The various types of GST returns are as follows:

1. GSTR-1 

GSTR-1 is the return that companies must file to record all outward supplies of goods and services or sales transactions made within a tax period and report debit and credit notes released. Any changes to sales invoices should be recorded in the GSTR-1 return, even if they relate to previous tax periods.

2. GSTR-2A 

The GSTR-2A is a tax return that contains information about all inward supplies of products and services or purchases made from registered suppliers within a tax period. The data gets auto-populated using information from the supplier’s GSTR-1 returns. Companies can take no action with GSTR-2A, since it is a read-only return.

3. GSTR-2

The GSTR-2 return is for registering inbound supplies of goods and services or sales made within a tax cycle. The GSTR-2A auto-populates the information in the GSTR-2 return. Here, taxpayer can edit the GSTR-2 return, unlike the GSTR-2A.

All regular taxpayers GST registered are required to file GSTR-2. However, since the inception of GST, government has suspended the filing of this form.

4. GSTR-3

GSTR-3 is a monthly summary return that summarises information on all outward supplies made, inward supplies collected, and input tax credit claims, as well as information about tax liability and taxes paid. This return gets generated automatically based on the filed GSTR-1 and GSTR-2 returns. All regular taxpayers, registered under GST must file GSTR-3. However, similar to GSTR-2, GST autorities have suspended the filing of this form.

5. GSTR-4 

A taxpayers, who is using the GST Composition Scheme are required to submit GSTR-4 return.

6. GSTR-5 

GSTR-5 is the return that non-resident foreign taxpayers registered for GST and conduct business in India must file. The return includes information about all outbound goods, inbound supplies, credit/debit notes, tax liability, and taxes paid. Companies need to file monthly return.

7. GSTR-6 

GSTR-6 is a monthly return that an Input Service Distributor(ISD) must submit. It outlines the ISD’s receipt and distribution of input tax credits. It will also provide a list of all documents provided to distribute input credit and how businesses spread them.

8. GSTR-7 

GSTR-7 is a monthly return that must be submitted by anyone who is supposed to deduct TDS (tax deducted at source) as part of the GST system. TDS deducted, TDS liability payable & charged, and TDS refund claimed, if any, will all be listed on GSTR 7.

9. GSTR-8

It is a monthly return that must be submitted by e-commerce operators who are eligible to collect tax at source under the GST (TCS). GSTR-8 will report all items sold via the E-commerce portal, as well as the TCS received.

10. GSTR-9

GSTR 9 is an annual return that GST-registered taxpayers must file once a year. It contains information on outbound and inbound supplies made/received during the relevant financial year under various tax heads, such as CGST, SGST, IGST, and HSN codes.

It is a compilation of all monthly/quarterly returns (GSTR-1, GSTR-2A, GSTR-3B) filed during that calendar year. This return facilitates comprehensive data reconciliation for complete open disclosures. 

11. GSTR-9C

GSTR-9C is a reconciliation document that must be filed by all GST-registered taxpayers, whose annual revenue exceeds Rs. 2 crore. A Chartered Accountant or Auditor must audit the registered person’s books of accounts. The reconciliation statement is the correlation between the taxpayer’s audited financial statements and the filed annual GSTR-9 return.

12. GSTR-10 

A business owner whose GST registration got terminated or has been withdrawn must file GSTR-10. This return is also known as a final return. The business owner must file GSTR-10 return within three months from termination date or closure order, whichever is earlier.

13. GSTR-11 

GSTR-11 is the return that individuals who have been given a Unique Identity Number (UIN) must file to receive GST reimbursement for products and services, purchased in India. UIN is a classification, created for international diplomatic missions and embassies that are not taxable in India to receive a tax refund.

Now we know the types of GST return, let us now look at GST annual return due dates for FY-2021.

Due Date for GST Return and other Compliances.

The following table shows the GST Return filing due date.

Type of Returns Under GSTPeriodDue Date 
GSTR-7 And GSTR-8February 202110th March 2021
GSTR-1February 202111th March 2021
GSTR-6 And B2B Outward SuppliesFebruary 202113th March 2021
PF and ESIFebruary 202115th March 2021
GSTR-5, GSTR-5A,GSTR-3BFebruary 202120th March 2021
PMT-06February 202125th March 2021
RFD-11FY 2021-2231st March 2021
CMP-09FY 2021-2231st March 2021
GSTR-9 and GSTR-9CFY 2019-2031st March 2021

How to file GSTR-9

Filing GSTR-9 is very easy if you use GSTR-9 filling software. It Automatically fills tables 1-14 of GSTR-9 form with precision. And moreover, you get 19 points on the essential checklist to recognize mismatches across the form. Let us now look at the steps to file gstr-9.

Steps to file GSTR-9

  1. To file Form GSTR-9, go over to Services
  2. Then Returns 
  3. And lastly at Annual Return.

Prerequisites for filing GSTR-9

  • Every day, a taxpayer must have an operational GSTIN during the financial accounting year.
  • Before filing the Annual Report, the taxpayer must submit all applicable returns for the financial accounting year, namely Form GSTR-1 and Form GSTR-3B.

Companies can file Nil GSTR-9 form if,

  • Not generated any sale and not purchased any goods/services.
  • No other liability for reporting.
  • And not obtained any input credit and not tried claiming any refund.
  • And not collected any order generating demand and there is no delayed fee to pay, etc.

Conclusion

To conclude, Goods and Service tax is the tax that speeds up the taxation process. A business must file annual gst return to stay gst compliant and avoid any penalty by authorities.

Categories
GENERAL

MSME Definition, Role and Importance – all you need to know.

Table of Contents

What is MSME?

MSME stands for Micro, Small and Medium Enterprises. MSMEs are primarily engaged in producing, processing, or preserving products and materials. In India, MSMEs contribute nearly 8% of the country’s GDP, around 45th of the producing output, and roughly 400th of its exports. Therefore, It won’t be wrong to refer to them as the “Backbone of the country”.

MSMEs are crucial for the Indian economy and have contributed a lot to socio-economic development. There are around 6,08,41,245 MSMEs in India as per the government’s annual report (2018-19).

Feature of MSME

Following are the number of the essential components of MSMEs:

  • Firstly MSMEs work for the welfare of the staff and artisans. They assist them by giving employment and by providing loans and alternative services.
  • MSMEs give credit limits or funding support to banks.
  • They promote the event of entrepreneurship and up-gradation of skills by launching specialized coaching centers for the same.
  • Also, they support the up-grading of developmental process technology, infrastructure development, and the sector’s modernization.
  • MSMEs produce the help to improve access to the domestic and export markets.
  • They additionally provide modern testing facilities and quality certification services.
  • Following the recent trends, MSMEs currently support development, style innovation, intervention, and packaging.

Role of MSMEs in Indian Economy

Since the formation of MSME, this sector has proved to be an extremely dynamic Indian economy sector. MSMEs turn out and manufacture a range of products for each domestic, additionally as international markets.

They help to promote the expansion and development of textile, village, and fibre industries. They need to collaborate and work with ministries, state governments, and stakeholders towards the rural area’s upbringing.

MSMEs have a vital role in providing employment opportunities in rural areas. However, as a complementary unit to massive sectors, the MSME sector has contributed significantly to its socio-economic development.

MSMEs also contribute and play a vital role in the country’s development in several areas, just like the demand of low investment, flexibility in operations, quality through the locations, low rate of imports, and a high contribution to domestic production.

Importance of MSMEs for the Indian Economy

Across the world, MSMEs are considered as an economic process method and promote development.

MSMEs have driven India to new heights through the basics of low investment, flexible operations, and the capability to develop acceptable local technology.

  • MSMEs employ around 120 million persons, named as the second-largest employment generating sector after agriculture.
  • With some 45 animal product units throughout the country, it contributes about 6.11% of the value from production and twenty-four—63% of the weight from service activities.
  • MSME ministry targets to extend its contribution towards value by up to five hundredths by 2025 as the Asian nation moves ahead to become a $5 trillion economy.
  • Contributing around forty-fifths of overall Indian exports.
  • MSMEs promote overall growth by providing employment opportunities, particularly to folks’ happiness, to weaker society sections in rural areas.
  • MSMEs in tier-2 and tier-3 cities facilitate making opportunities for folks to use banking services and merchandise, which may amount to the ultimate inclusion of MSMEs’ contribution to the economy.
  • They promote innovation by providing new entrepreneurs a chance to help them build artistic merchandise, boost competition in business, and fuel expansion.
  • The Indian MSME sector provides silent support to the financial system and acts as a defense against world economic shock and adversities. Hence, we can say that Asian countries are dynamic towards a healthy world economy through a silent revolution high-powered by MSMEs.

Categories
GST

Download GST Registration Certificate from GST Portal – a complete guide.

Introduction

Taxpayer, who has registered for GST, can download GST Registration Certificate from GST Portal. The government does not issue any physical copy of the GST Registration certificate. We need a GST Registration certificate for various purposes – doing partnership with other business, opening a bank account, GST audit, etc. GST certificate is also called Form GST REG-06, which can be downloaded from the official GST Portal.

Steps to download GST Registration Certificate:

To download GST certificates issued by the GST authorities, follow the steps given below:

Step 1: Access this website www.gst.gov.in. The GST Home page will open.

Step 2: Log in to the GST Portal with valid credentials.

Step 3: After that, click the Services > User Services > View/Download Certificates command.

Then, all the Goods and Service Tax certificates are displayed in descending order as below.

Here, you can download the GST registration certificate by clicking on the download icon as shown in the image.

However, if you have not yet registered your business under GST in India, then you must register it to get the GST registration certificate. You may read our article on the GST registration process to register your business to get a GST registration certificate under GST. After you complete GST registration online you can download GST Certificate.

Categories
GST

How to avail Input Tax Credit (ITC) if Supplier has not uploaded Invoices?

Input Tax Credit

Table of Contents

What is the Input Tax Credit (ITC)?

The Input Tax Credit (ITC) is the tax paid on the purchase of goods or service, which can be set off against the tax liability on the sale of goods or services.

How to avail Input Tax Credit (ITC) if your Supplier has not uploaded Invoices?

Generally, under the system of GSTR-1 and GSTR-3B, the tax credit is claimed by the recipient according to the sales invoice uploaded by the seller. However, the ITC claim will not be allowed if the supplier has not uploaded Invoices.

The ITC in the buyer’s account reflects as soon as the seller uploads the invoice, but in case of a delay, the buyer’s ITC cannot be availed for that particular month. In this case, the CBIC released an important notification on 9 October 2019, inserting under rule 36(4) of the CGST Rules, 2017.

This rule states that, the provisional tax credit (without invoices on GSTR-2B) can be claimed in the GSTR-3B to the extent of 5% of eligible ITC reflected in the GSTR-2B.

Hence, the total ITC that can be claimed in GSTR-3B is 105% of the eligible ITC appearing in GSTR-2B of a particular period. As per the sub-rule 4 inserted in rule 36 of the Central Goods and Service Tax Rules, 2017, a taxpayer filing GSTR-3B can claim provisional Input Tax Credit (ITC) only to the extent of 5% of the eligible credit available in GSTR-2A.

The amount of eligible credit arrives upon those invoices or debit notes, whose details have been uploaded by the supplier in the GSTR-2A only.

The new percentage applies from 1 Jan 2021 onwards. The ITC claim was earlier restricted to 10% between 1 Jan 2020 and 31 Dec 2020, whereas it was 20% for the period from 9 Oct 2019 till 31 Dec 2019.

After implementation of Tax Rule what changes will take place?

I will take an example to make you understand this thing.

If a taxpayer is filing his GSTR-3B for the month of January 2021, here is how he could claim the input tax credit in his GSTR-3B after the implementation of the rule.

  1. The total eligible ITC is Rs.1,00,000 ,eligible ITC available in the GSTR-2B will be Rs.60,000.
  2. ITC that can be claimed, as the provisional credit will be Rs.3,000 (60,000*5%),
  3. Total ITC that can be claimed in the GSTR-3B will be 63,000; and ITC not allowed in the GSTR-3B of January 2021 will be Rs. 37,000.

It is noteworthy that the amount of ITC that is not available this month, will become available once the seller uploads the corresponding invoice in their subsequent GST returns.

So, if the buyer’s GST liability is Rs.80,000, they will have to pay the balance amount of Rs.17,000 in cash (Rs.80,000 – Rs.63,000).

But if the entire ITC is available, the buyer need not pay anything in cash.

What is the Eligible ITC?

It is the ITC related to a taxpayer’s business activities such as purchases made, services received, capital assets bought, etc. which is eligible to be claimed to set off GST liabilities.

The GSTR-2B could also contain ineligible ITC reflecting that relates to expenses such as food, club memberships, personal expenditure, etc or even ITC mistakenly reflected due to the wrong GSTIN entered by a supplier.

Hence, only eligible ITC will be considered while calculating the limit for 5% provisional credit.

In the initial phase of 6 months, the recipient will have an option to avail ITC on a self-declaration basis even on the invoices not uploaded by the supplier by the 10th of the next month by using the facility of availing ITC on missing invoices.

The input claimed on the missing invoices by the recipient shall be filed by the seller within the next two tax periods from the input claimed by the recipient.

If this is not filed by the supplier, the input claimed by the recipient shall be reversed with interest and penalty.

For example, if Mr. A purchased goods from Mr. B in the month of March 2018, Mr. B failed to report the same in the March 18 returns. Mr. A has an option to claim the credit in March 2018 returns and Mr. B has to report the same by May 18 returns. If Mr. B missed reporting the same by May 18 then the ITC claimed by Mr. A shall be reversed on June 18 returns with interest and penalty.

Categories
GROW YOUR BUSINESS

Freelancer Payment – Ways You Should Know to Improve Cash Flow.

Money is an important part of doing any business and the reason we all work for, but money is also where many freelancers run into trouble. There are many payment modes a freelancer can use to accept payment from clients and manage the cash flow seamlessly. Here are the top 10 ways for freelancers to achieve financial success.

1. Get Separate Bank Accounts For Business

While working as a freelancer, do not mix your personal and professional accounts. Get a separate current account, and savings account set up for your business. This will make your accounting, taxes, and legal compliance much easier.

2. Create Payment Links to collect freelancer payment

You can create a payment link to request payments from customers without a website. In other words, you can send payment links to customers through SMS, Whatsapp, email, or social media. The payment link will direct your customers to the payment page to pay using different payment modes – debit card, credit card, UPI, net banking, etc.

Advantages of Using Payment Links for freelancer payment

  • Convenient & easy way to collect payment from customers, via a payment link. Customer can make a payment through the smartphone without having any installed mobile applications.
  • Multiple payment choices are accessible for the customers in the received payment links, like Credit cards, Debit cards, UPI, QR code, net banking etc.
  • Option for saving customer data for regular customers is available, where certain fields are prefilled to speed up the payment.
  • As per the study, a payment link has been chosen by 63.5% of freelancer for freelancer payment.

3. Create and send Invoice

Sending a freelance invoice to your client by email or Whatsapp shows your client that you’re professional. It also makes it much easier for them to pay you quickly. While you can always DIY your invoice and send it over as an attachment, there are much easier solutions out there. The best tax and accounting software allows you to create and send invoices via email & WhatsApp in just one click.

For example, using Enalo, you can create and send invoices without any hassle.

4. Send Customer a Payment Reminder

Don’t be shy with payment reminders. There may be hundreds of possible explanations for why your client is not responding to you. If you’ve already emailed an invoice and have received no response, wait for a few days and send an email to confirm that they have received the invoice. You can mail them using very polite language. For example:

Hi, __,

I hope you are doing well. I’m emailing to confirm that you received the invoice for (add project name). I sent that last week and wanted to confirm that everything is in order.

As you know, my payment terms are ____ days (whatever you agreed on), and your payment will be due on ___ (enter due date). I hope you will clear your dues on time respecting our payment terms.

Thank you for your time,

So this is the best way of sending a payment reminder to your customer.

5. Interest On Overdue Invoices

If invoices are not taken seriously and you won’t get your dues completed on time, do not forget to use your entitlement to statutory interest and compensation. Whether you impose it or not, is up to you. while dealing with consumers, make sure you put any interest you want to claim in your terms and conditions.

6. Use a credit card

Freelancer should use credit cards for payment of bills and other work-related expenditure. So that it doesn’t create any issue when clients delay freelancer’s payment.

7. Special saving

At certain times of the year, like tax season or when you want to invest in a big project or when you want to do internal reinvestment, you need more cash in hand than normal. As a freelancer or business person, you have the power to adjust payment options to create quick cash infusions by incentivizing specific payment options.

Each year, several clients would request the option to pay for new projects before the end of the year to boost their own expenses. In this case, you can quickly create a cash infusion at the right time, or you can strategically offer a discount if clients pay in full at the start of the project using payment link.

8. Variety Makes The Cash Flow

The key to getting off the income roller coaster and improving cash flow is variety, variety in the type of invoicing, variety in the types of payment mode and payment plans offered, variety in the lengths and types of the projects accepted by the clients.

When you combine variety with a solid, dependable, reliable income base your money stress will practically disappear, and you’ll have the ability to strategically plan ahead.

9. Expand Your Client Base

Unless you have a long-term contract with any client who pays you handsomely, you probably shouldn’t limit yourself to only one project at a time. If a customer flakes on you and they’re your only source of income, you’ll be in a trouble.

I also understand, handling more than one project at a time can be difficult, depending on their complexity. As a freelancer, you’re wholly responsible for managing your own time, so it’s essential to determine how much work you can handle.

To play it safe, you must have at least two sources of income at a given moment. If you have one client whose projects eat up several hours each day, you can work around this by taking on smaller and fast-paying gigs to manage your savings.

10. Accurately record all the income and expense.

It’s extremely important to keep an accurate record of your income and expenses throughout the year. These records are not only required when paying taxes but you also get to see how much you’re earning and how much you’re spending. It’s wise to update your income and expenses record as frequently as you can at least monthly.

Categories
Banking PAYMENTS

UPI: All you need to know

We are living in a digital world. The condition is such that mobile phone has become more essential than food. It is so because a mobile phone has become a personal assistant for many things. Its wonders include online payments with the click of a button. Thanks to the phenomenal innovation of UPI. Now, online transactions are easy like never before.

Want to know more about it? Here you go.

Table of Contents

What is UPI?

Developed by the National Payments Corporation of India, UPI is an instant real-time payment system. Here, the payments can be made through an app on a mobile device only. The best thing is that you can transfer money 24×7! And that too without any charges!

Due to its ease of use, it has become a preferred payment method among people. It is evident by the fact that UPI witnessed more than 2800 Crore transactions till June 2021. It is fantastic, isn’t it? The transactions aggregated to $71 Billion! (Source: NPCI)

Minimum Requirements

You don’t have to struggle to fulfil the minimum requirements. A phone with an internet connection is sufficient for doing the transactions. Ensure that you have installed the UPI application and created an MPIN.

That’s it! You are good to go.

How does UPI work?

Firstly, the user needs to create a Virtual ID or Virtual Payment Address (VPA). For doing so, he has to link UPI to any bank account. The process does not need any recipient or payer to share bank details. So, you don’t have to worry about scams.

The VPA acts as a financial address. Hence, there is no need to remember the beneficiary account number, IFSC code, or net banking user ID/password. You just have to remember a PIN for doing transactions. At least you can remember it, right?

UPI Registration

Registration is no rocket science. You can register in 3 simple and easy steps:

  • Firstly, the user needs to download the UPI application from the App Store/Original website of the bank. E.g., Paytm, PhonePe, etc.
  • Secondly, the user has to create his/ her profile by entering details. It includes name, virtual ID (payment address), password etc.
  • And lastly, the user has to Add/Link a Bank Account with the virtual ID.

Generating M-PIN

Entering an MPIN is the key to secure transactions. As it is permanent, it frees you from the hassle of receiving OTP. Therefore, the success rate becomes high due to the absence of OTP.

You can generate an MPIN by completing the following steps:

  • Firstly the user has to select the bank account from which he/she wants to initiate the transaction.
  • Secondly, the user has to click on create/change M-PIN option.
  • Now user has to type debit card expiry date along with the last 6 digits in the relevant field.
  • And now the user has to type the OTP pin generated by his/her bank and sent to his/her registered mobile number.
  • Lastly, the user needs to set the desired M-PIN and click the Submit button.

Why Use UPI?

UPI not only benefits the customers. But merchants have their advantages as well. In short, you can call it a win-win situation for them. Here are the benefits UPI offers:

Benefits for Merchants

  • No storage risk: Debit and Credit cards contains lot of vital information. Like the name, CVV, card number, etc. It may go in wrong hands. And cause more harm than good.

But that is not the case with UPI. Only the UPI ID is known to others. So, vital banking information is protected.

  • Seamless Fund Collection: Unlike NEFT or RTGS, the transactions are processed instantly. So, the people don’t have to wait to receive funds. Also, there are no charges involved. That is why the customers are willing to pay through UPI.
  • Ease of Payment: Your customers don’t need any credit/debit card for payment. They can directly pay you from UPI linked with their bank account.
  • Better Security: It provides a single-click two-factor authentication facility to the customer. So, the safety of transaction is ensured.

Benefits for Customers

  • 24*7 Availability: UPI transactions are available 24*7. You can do it at your convenience. And you don’t have to wait for the banking hours.
  • Single Application, Many Accounts: You can add more than one bank account to your UPI ID. So, you can pay as per the availability of the funds in your account.
  • No Charges: While other payment methods may cost you, UPI doesn’t. Hence, it helps you to save transactions costs significantly, especially if you are a shopaholic.
  • Ease of Transactions: You have to enter many details while transacting through different methods. But that is not the case with UPI. You just have to enter your UPI ID and the MPIN. Congrats, your transaction is complete.

That is why it saves your time as well. And you know that ‘time is money.’

Things to Keep in Mind

  • Be aware of Mobile phishing. Ensure that you download the UPI applications from official sources only.
  • Set strong passwords for your phone and UPI application.
  • Do not share your MPIN with anybody. Not even with the bank. As it is the only protection for the transaction.
  • Use biometric authentication for your UPI app, if possible.
  • Update your mobile and applications from time to time. As new versions are considered more secure.
  • It is advisable to enable encryption. You can also download anti-virus software on the phone.
  • Keep your SIM card locked with a pin to avoid misuse.
  • In case of loss or theft of the mobile device, contact your subscriber to block the subscription of the SIM card.
  • Don’t connect your phones to unsecured wireless networks that do not need passwords to access. ‘Free Wifi may cost you much more than mobile data.’

Closing Remarks

UPI has made transactions possible at the click of a button. Due to its benefits, it has become popular, even among the banks. That is why 227 banks are live on it.

In the end, don’t underestimate the immense potential of UPI. It has the ability to transform the banking industry.

Frequently Asked Questions (FAQs)

  1. What is the daily limit of UPI?

The daily transaction limit is Rs 1 Lakhs! But it may vary from bank to bank.

2. What happens if I enter an incorrect UPI pin?

If you enter the wrong PIN, then the transaction fails. If this is repeated many times, the bank may block you from transferring funds temporarily.

3. The money is deducted but the transaction failed. What should I do?

If the money is deducted, the transaction will complete. It may take a long time due to technical issues. If the transaction failed, the money will be refunded to your bank account within a few working days. However, you can contact the bank to confirm the status.

4. Do I have to register a beneficiary before transferring funds?

Registration of beneficiaries is not required. You can transfer funds to anyone you want.

5. Do the transferee have to register for UPI as well?

No, registration is not mandatory for the beneficiary. You can directly transfer the funds through account number and IFSC code.