GST Explained


India adopted the GST or the Goods and Services Tax on 1st July 2017. It is a destination-based indirect tax that replaced many indirect taxes incorporated by Centre and State previously like excise duty, service charges, VAT, etc. This brought unity in the taxation system of the country and re-shaped the economy. 

GST Explained

GST management

With the implementation of the Government of India also formed a Council. This GST council holds the responsibility to govern the Goods and Services Tax. The Indian model is a dual model. This means the taxation is administered both by the Centre and the State Governments. So, if a good bought in a particular state is levied upon by two taxes CGST or Central by the Central Government and SGST or State GST by the State Government. 

What is GST Council?

Council is the main governing body that modifies, reconciles, or procures any law regarding India. It is headed by the Union Finance Minister of India and assisted by the finance ministers of all Indian states and UTs. 

Structure of GST Council

The GST Council is a joint panel of the Centre and the State Governments. It consists of the following members:

  1.   Chairman of GST Council– Union Finance Minister
  2.   Members-

i)The Union Minister of India, Minister of Finance, in-charge of Revenue

  1. ii)    Minister-in-charge of taxation or finance or any other nominated member by each State Government.

Any council decision is concluded by a three-fourth majority, with the State holding two-thirds votes and the centre holding the rest one-third. 

Responsibilities of the GST Council

The foundation of the Council was laid to make recommendations on various features of to the Centre and the States. The Council provides recommendations on the following:

  • The taxes and surcharges can be subsumed in the GST.
  • The goods and services that can be included or exempted from the GST.
  • Mould laws, apportionment of IGST, levy principles, and the rules that administer the place of supply.
  • The threshold limit of revenue generated below which the goods and services can be exempted from GST.
  • GST rates, inclusive of floor rates.
  • Any special rates that can be temporarily created to raise additional funds during any natural disaster. 
  • The special provision concerning the States of Assam, Arunachal Pradesh, Jammu & Kashmir, Meghalaya, Mizoram, Manipur, Nagaland, Sikkim, Tripura, Uttarakhand, and Himachal Pradesh.
  • Any other matter regarding as per the council decision.

How does GST work?

Invoices act as proof of goods or services being sold. Companies use these documents to collect payments from customers for a particular sale transaction. These contain details like goods or services sold, price, quantity, terms of supply, applicable tax, etc. GST also uses these invoices as a tool to implement the taxation system in the country. You can use technology and create GST invoice in excel or word.

But there are different types of invoices issued under the law. These depend on the type of registered taxpayer, nature of services or goods supplied, term of payment, etc.

So, invoices are needed to record sales, protect a business from fraudulent activities, collect input credit, etc. Hence these become a crucial part of businesses. 

This makes it necessary that you know the format that goes into the creation of tax invoices. There are multiple tutorials online that will help you learn how to create invoices in excel or word. Be a good citizen and pay taxes on time!

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