GST Dictionary for Starters: From A for 'Anti-profiteering' to Z for 'Zero Rating'
With goods and services tax regime come a plethora of jargons which may confuse those who don’t have finance or legal background.
Representative image. (Network18 Creatives)
New Delhi: With goods and services tax regime come a plethora of jargons which may confuse those who don’t have finance or legal background. News18 brings you a simplified dictionary of GST lingo. Once you read it, you will be able to talk about GST like a boss.
GST: Goods and Services Tax, a single levy on goods and services to replace the plethora of indirect taxes
SGST: State GST, the portion of the tax that goes to state governments
CGST: Central GST, the portion of revenues that accrues to the Central government
IGST: Integrated GST is levied on the supply of goods or services in the course of inter-State trade
Double Taxation: When tax that is collected more than once on the same item. GST will eliminate double taxation
Cascading Taxes: Paying taxes on taxes, or simply put, an item on which taxes add up at each stage in the value chain from manufacturer to consumer
Input Tax Credit: At each stage in the value chain, the tax paid at the previous point can be reclaimed under GST. This will reduce the amount of money paid as tax and should make an item cheaper
VAT: Value Added Tax, which is a levy paid when value is added in the supply chain of a good or service. VAT will be subsumed by GST
Excise Duty: A tax on manufactured items. Excise is levied as soon as a manufactured item leaves the factory gate. This will also be subsumed by GST
GST Network: An organization formed to create a common platform for the stakeholders, government, taxpayers to collaborate on a single portal
Taxable Person: Under the GST law, any entity that carries out business and has annual turnover of more than Rs 20 lakh (Rs 10 lakh for Northeastern and hill states) is taxable person
GSTIN: Every ‘Taxable Person’ will be issued a unique 15 digit GST Identification Number to make the tracking of transactions more transparent
Zero rating: Goods and services that are not taxed. Essential food items have been kept in this category
Anti-profiteering: The government has kept a clause in the GST laws wherein the businesses will have to pass on any benefit arising due to lower tax rates under GST regime directly to consumers. If any business is found guilty of making extra profit from this, it will be liable to heavy fine
Composition dealer: A small businessman who can pay tax at concessional rate without collecting it from customers
Composite supply: Supply of two or more goods or services which are usually supplied as a combined unit. In such cases, tax will be charged on the main ingredient/component
Distinct persons: Branches of an organisation registered under separate GSTINs
Reverse charge: The liability to pay tax is on the recipient of goods or services and not on the supplier. Businesses will have to pay GST each time they buy from factories or dealers
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