FAQ

Frequently Asked Questions

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What is GST?

GST well known goods and service tax. This indirect tax is used in India on the supply of goods and services. It is a detailed, multistage, tax dependent on destinations.
GST is added to the price of product and a consumer who purchases the product recompense the sales price inclusive of GST
GST is a tax which is paid on goods and services sold domestically for consumption. This is a common tax used by the majority of countries globally.

Advantage of GST?

In particular, the cascading impact on the selling of products and services has been eliminated by GST. The cost of products has been impacted by the elimination of the cascading effect. As the levy on taxes is eliminated by the GST regime, the cost of goods decreases.

Components of GST?
The components of GST are divided under three categories: -

• IGST: This tax is applicable when there is inter-state transfer of goods and services

• CGST:This tax is collected by the central government of India. CGST is applicable on all intra-state supplies of goods and services

• SGST: This tax is applicable where the location of the supplier and place of supply are in same location

Benefits of GST?

The benefits of GST are mentioned below :-

• Removal of Cascading Effect- Implementation of the GST would ensure the avoidance of the cascading impact of taxation

• Regulation of unorganized Sector- The provisions of GST would help streamline the online enforcement and payment process and thus help to control the unorganized market

• Increase in revenue- 17 indirect tax has been replaced by single tax (GST), it will lead to increase in product demand which will simultaneously lead to increase in revenue for the central and the state government

• Uniform Tax Structure- It harmonizes country-wide rules, processes and tax rates, resulting in a simpler tax structure

• Online procedure under GST- The whole process under GST is online from registration to return filing so this will be advantageous for all startup companies who do not have to choose for registration under various tax regimes

What is the framework that GST follows?

India practice dual gst framework

CGST and SGST, would be levied at inter-state level transactions

Only IGST would be levied inter-state level transactions

Export and SEZ supplies would be zero rated

Import would be processed as inter-state supply

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What is GSTIN?

The tax identification number, which is now known as GSTIN, is one of these things (Goods and Services Tax Identification Number). Basically, GST is a 15-digit number that has replaced the Tax Identification Number (TIN) issued to business entities when registering under the Value Added Tax Law of a state.

What is the indirect tax that GST has replaced?

• Cental Tax:

1. Central Excise duty

2. Central sales tax

3. Service tax

4. Additional duties of customs

5. Additional duties of excise

6. Excise duty levied under the textiles and textile product

• State- level Tax:

1. Purchase tax

2. Central sales tax

3. VAT

4. Entry Tax

5. Taxes on lottery

6. Gambling and betting

7. Taxes on advertisement

Who are the taxable person under GST?
The benefits of GST are mentioned below: -

• Removal of Cascading Effect- Implementation of the GST would ensure the avoidance of the cascading impact of taxation

• Regulation of unorganized Sector-the provisions of GST would help streamline the online enforcement and payment process and thus help to control the unorganized market

• Increase in revenue- 17 indirect tax has been replaced by single tax (GST), it will lead to increase in product demand which will simultaneously lead to increase in revenue for the central and the state government

• Uniform Tax Structure- It harmonizes country-wide rules, processes and tax rates, resulting in a simpler tax structure

• Online procedure under GST- The whole process under GST is online from registration to return filing so this will be advantageous for all startup companies who do not have to choose for registration under various tax regimes

Income Tax in India 2020

In India, tax is levied on individual taxpayers on the idea of a slab system where different tax rates are prescribed for various slabs and such tax rates keep increasing with a rise within the income slab.

• Existing tax regime: There are three categories of individual taxpayers: Individuals (below the age of 60 years), which incorporates residents also as non-residents senior citizens (60 years and above but below the age of 80 years) super senior citizens (above 80 years of age) There are different slabs for every category of taxpayers. The latest tax slabs for AY 2019-20, AY 2020-21 and AY 2021-22 are discussed during this article.

The tax calculated on the idea of such rates are going to be subject to health and education cess of 4%. Any individual opting to be taxed under the new tax regime from FY 2020-21 onwards will need to hand over certain exemptions and deductions.

Point to remember while opting for the new tax regime.

Option to be exercised on or before the due date of filing return of income for AY 2021-22 In case a taxpayer has a business income and exercised the option, he/she can withdraw from the option only once. A business taxpayer withdrawing from the optional tax regime has to follow the regular income tax slabs.

According to the current income tax laws in India, the income tax rate on resident individuals varies based on their age. There are different tax slabs applicable to the individuals for the financial year 2018-19 and 2019-20. For instance, a resident individual, aged below 60 years, with an income less than Rs 2.5 lacs is exempt from paying income tax.

Here is the list of exemptions and deductions that a taxpayer will have to give up while choosing the new tax regime?

HRA (House Rent Allowance)

Conveyance

Children education allowance

LTA (Leave Travel Allowance)

Standard Deduction

Helper Allowance and more...

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