GENERAL UPDATES

Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017 and is applicable throughout India which replaced multiple cascading taxes levied by the central and state governments.
There are 3 applicable taxes under GST: CGST, SGST & IGST

• CGST : Collected by the Central Government on an intra-state sale
• SGST : Collected by the State Government on an intra-state sale
• IGST :  Collected by the Central Government for inter-state sale

The single GST(goods and service taxes) replaced several former taxes and levies which included: central excise duty, services tax, additional customs duty, surcharges, state-level value added tax and Octroi. Other levies which were applicable on inter-state transportation of goods have also been done away with in GST regime. GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or import of goods and/or services. India adopted a dual GST model, meaning that taxation is administered by both the Union and State Governments. Transactions made within a single state are levied with Central GST (CGST) by the Central Government and State GST (SGST) by the State governments. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central Government.

HSN code in GST

HSN (Harmonized System of Nomenclature) is a 6-digit code for identifying the applicable rate of GST on different products as per CGST rules. If a company has turnover up to Rs. 1.5 Crore in preceding financial year then they need not to mention HSN code while supplying goods on invoices, if a company has turnover more than 1.5 Cr but up to 5 Cr then they need to mention 2 digit HSN code while supplying goods on invoices and if turnover cross 5 Cr then they shall mention 4 digit HSN code on invoices.

MISCELLANEA

History of Taxation

The origin of the word “Tax” is from “Taxation” which means an estimate. The levying of taxes dates back to 2000 years across many empires – Greece, German and Roman empires. For many centuries, revenue from taxes went to the Monarch.

As with most problems, taxation problems date back to earliest recorded history.

In India, the system of direct taxation has been in force in one form or another even from ancient times. There are references both in Manu Smriti and Arthashastra to a variety of tax measures. Manu, the ancient sage and law-giver stated that the king could levy taxes, according to Shastras.  He advised that taxes should be related to the income and expenditure of the subject. The detailed analysis given by Manu on the subject clearly shows the existence of a well-planned taxation system, even in ancient times. Not only this, taxes were also levied on various classes of people like actors, dancers, singers and even dancing girls. Taxes were paid in the shape of gold-coins, cattle, grains, raw-materials and also by rendering personal service.

Kautilya’s Arthasastra, deals with the system of taxation in an elaborate and planned manner, written sometime in 300 B.C.  A major portion of Arthasastra is devoted by Kautilya to financial matters including financial administration. According to famous statesman, the State not only collected a part of the agricultural produce which was normally one sixth but also levied water rates, octroi duties, tolls and customs duties. Taxes were also collected on forest produce as well as from mining of metals etc. Salt tax was an important source of revenue and it was collected at the place of its extraction. Kautilya described in detail, the trade and commerce carried on with foreign countries and the active interest of the Mauryan Empire to promote such trade.