Basic Terminology

Basic Terminology with Defination Used Under GST

All About Basic Terminology used Under GST

Here are a few GST  terminology and definitions you must to know. these terms are described as follows:

GST

Goods And Services Tax is an indirect tax which applicable in India from July 2017. The GST is paid by consumers, but it is paid to the government by the businesses selling the goods and services.

ARN

ARN is an acronym for Application Reference Number which is created at the time of submitting enrollment application that is signed using EVC or DSC over the GSTN Portal. Under ARN, a unique number is provided for doing any transaction at GST System Portal. It must be noted that ARN can also be used in the future course of GST.

Goods and Services Tax Network

GSTN, an Indian not-for-profit, the non-government firm who manage the whole IT System(GST Online Portal). In GSTN 51% shares hold by Private Firms and rest 49% shares hold equally With the state & Central Government.

GSP (GST SUVIDHA Provider)

In Simple words, GSP introduced by GSTN to redistribute his work in multiple channels to stop hanging process of the servers on last moment of return submit date. GSP will integrate with the Common Portal.

GST SUVIDHA Provider

ASP (Application Service Providers)

ASPs will work like a medium between the taxpayers and the GSPs to maintain the client’s data and forward that to GSP.

For Example:- Suppose there are millions of taxpayer’s and they want to upload their final return then there is two way to follow one of them.

A. First Way, They Communicate with ASP for Upload their final return on their system. after that ASP communicate with any GSP to Upload their client’s data to GSTN Portal.

B. Second Way,  Clients can directly communicate with GSP and Upload their data to GSP Server. Now GSP responsible for upload that clients data on GSTN Portal.

GSTIN

GSTIN is a tax registration number allotted to GSTN dealers for business purpose in GST. Its a 15 Alphanumeric combination Format is Shown Below.

GSTIN

Assessment under GST

Goods and Service Tax(GST) will build up all indirect taxes under one umbrella and help Indian businesses become globally competitive. To facilitate easy calculation and payment of taxes, GST has a board for assessments such as self-assessment.

Assessment means the determination of tax liability under GST law. There are the various types of assessment are shown under GST.

Capital Goods under GST

Capital goods are assets such as buildings, machinery, equipment, vehicles and tools that an organization uses to produce goods or services.

CGST and SGST Under GST

Intra-State supply: -In case goods/services is when the supplier’s location and the POS are within the state. In Intra-State transactions, a seller has to collect both CGST and SGST from the buyer. The CGST gets deposited with Central Government and SGST gets deposited with State Government.

IGST Under GST

Inter-State supply: -In case goods/services is when the location of the supplier and the place of supply are different states.

Composition Dealer Under GST

Composition Scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore if it is more than 1.5 crore than taxpayer is not able to opted as Composition Dealer.

Credit Note and Debit Note Under GST

What is Debit Note?

A debit note in GST is a document issued by the supplier in the following cases:

  1. Increase in the Taxable Value If the supplier needs to increase the taxable value of a supply, then he/she simply needs to issue a debit note to the respective recipient.
  2. Increase in GST charged in invoice If the supplier requires increasing the rate or value of GST charged in an invoice, he/she has to issue the debit note to the recipient.

What is Credit Note?

A credit note in GST is a document which is issued by the supplier in the following cases:

Supplies are returned or found to be deficient by the recipient – When goods supplied are returned by the recipient or goods/services supplied are found to be deficient by the recipient, the supplier should issue a Credit Note.

Decrease in the taxable value – If a supplier needs to decrease the taxable value of a supply, Then he/she simply needs to issue a credit note to the respective recipient.

A decrease in GST charged in the invoice – When a supplier requires decreasing the rate or value of GST charged in an invoice, he/she has to issue a credit note to the recipient.

Digital signature certificate(DSC) Under GST

A Digital Signature is an electronic signature that can be used to sign electronic documents. Just the way physical documents are validated by a handwritten signature, electronic documents are validated by signing them through a digital signature.

Electronic verification Code (EVC) Under GST

Electronic verification Code is a one-time password sent to the registered mobile number for filing returns online. The EVC will be a 10 digit alpha-numeric number.  Invalid, already used or unmatched EVC shall be rejected.

Payment Under GST

Under GST the tax to be paid and it is mainly divided into three sections–

IGST and CGST – To be paid when interstate supply is made (paid to center)

SGST – To be paid when making supply within the state (paid to state).

GST payment can be made in 2 ways –

Payment through Credit  Ledger – The credit of ITC can be taken by dealers for GST payment. The credit can be taken only for payment of Tax. Interest, penalty and late fees cannot be paid by utilizing ITC.

Payment through Cash Ledger – GST payment can be made online or offline. The challan has to be generated on GST Portal for both offline and online GST payment. Where the tax liability is more than 10,000 R.s,  then it is mandatory to pay taxes Online.

Payment through Cash Ledger

GST  Refund Under GST

Usually when the GST paid is more than the GST liability, then a situation of claiming GST refund arises. Under GST the process of claiming a refund is standardized to avoid confusion. The process is online and time limits have also been set. The refund application has to be made in Form RFD 01 within 2 years from relevant date.

HSN Under GST

HSN stands for “Harmonized System of Nomenclature”. This is a multipurpose international product developed by the World Customs Organization (WCO). It’s first to come into effect in 1988.

It was originally using 6-digit HSN codes to classify commodities for Customs and Central Excise. Later Customs and Central Excise added two more digits to make the codes more precise.

Input service distributor Under GST

An Input service distributor or ISD is a business which receives invoices for services used by its branches. It distributes the tax paid, to such branches on a proportional basis by issuing an ISD invoice.

Input Tax Credit Under GST

Input credit means at the time of paying tax on output, you can reduce the tax if you have already paid on inputs and you just need to pay the balance amount.

OTP

OTP means One Time Password is a six-digit code in The GST which is use to authenticate the user credencial.

Reverse Charge Under GST

The supplier of goods or services pays the tax on supply. In case of Reverse Charge, the receiver becomes liable to pay the tax, i.e., the chargeability gets reversed.

SAC Under GST

Services Accounting Code (SAC)is issued by CBEC to classify each service under the Goods and Service Tax regime. Each service has a unique SAC code and these SAC codes can be used in invoices created by you for the services you delivered.

Unit Quantity Code (UQC)

The Basic Purpose of using UQC under GST  is to maintain a standardized terminology for units of measure.

it’s a  measurement unit such as 1 Kg of Rice to be denoted in the invoice as 1 KGS, 1 ltr of Seed oil as 1000 MLT, etc

Zero-rated supply Under GST

Export supplies of a taxpayer registered under GST are classified as zero-rated supply(Nil Rated). Zero-rated supply under GST is eligible for the refund here taxpayers are required to furnish details of all zero-rated supply in GSTR 3B return and GSTR 1 return.

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