Hello friends, Today I’m going to explain a topic "GST Framework In India"
SAC Code is a labeling system for services formed by the Service Tax Department of India. Using GST SAC code, the GST rates for services are set in five slabs namely 0%, 5%, 12%, 18%, and 28%.
Thanks for reading friends, I will bring more such interesting topics related to taxation.
You can read "GST in India - An Introduction"
1. DUAL GST
The Dual GST (Goods and Services Tax), was launched in India to clarify the entire GST process system. GST was launched so that the whole taxation system would become less complicated therefore delivering the economy rise. The Dual GST system was introduced so that the whole process could become less complicated. This also helped in obtaining the quote ‘One Nation One Tax’ true. So let us understand Dual GST.
Dual GST is a type of GST in which both SGs and CGs will levy GST individually, rather than center alone levying taxes and sharing their revenues with the states. They will have various rates and possibly different commodities and services in which they are levied.
The Components of Dual GST are:
1.CGST (Central GST)
2.SGST (State GST)
3.UTGST (Union Territory GST)
4.IGST (Integrated GST)
2. CGST/SGST/UTGST/IGST
CGST
Central Goods and Services Tax or CGST is the indirect tax levied by the Central Government (CG). It is levied on the transaction of goods and services which are initiated within the state i.e. intrastate.
SGST
State Goods and Services Tax or SGST represents the tax imposed by the State Government(SG). SGST is levied on the transaction of intra-state sales of goods and services, i.e. sales made within a state.
UTGST
UTGST is exactly the way linked to SGST. The only variance is that the tax revenue goes to the treasury for the particular direction of union territory where the goods or services have certainly been used. There is a key differentiation between union territory and states. The Union Territory immediately comes under the direction of the Central Government and does not have its own elected legislature as in the case of States.
IGST
IGST is levied on all inter-state supply of goods and services by the Central Government. CGST, SGST & UTGST which are levied upon the supply of goods or services within a state.
IGST has given a uniformity to taxation on the supply of goods and services made outside the state. These practices both at a supply made outside the state and those made outside the country.
3. LEGISLATIVE FRAMEWORK
There is single legislation – GGST Act, 2017 for levy GST similarly,
- Union Territories without Legislatures:
- Andaman and Nicobar Islands
- Chandigarh
- Daman and Diu
- Dadra and Nagar Haveli
- Lakshadweep
- Ladakh
- Jammu & Kashmir
Union Territories with their own legislatures:
- Ponducherry
- Delhi
There are 35 GST Act in India:
4. CLASSIFICATION OF GOODS & SERVICES
Harmonised System of Nomenclature (HSN) is used for classification of Goods:
HSN codes to be declared:
- In the case of Imports/Exports, the HSN code of 8 digits shall be compulsory.
Definition HSN Code?
HSN code stands for “Harmonized System of Nomenclature”. This system has been entered for the methodical classification of goods all over the world. HSN code is a 6-digit uniform code that classifies 5000+ products and is accepted globally. It was developed by the World Customs Organization (WCO) and it came into force from 1988.
Work of HSN code?
It has about 5,000 product groups, each named by a six-digit code, designed in a legal and logical arrangement. It is recommended by well-defined rules to perform consistent classification.
Importance of HSN?
The main objective of HSN is to categorize goods from all over the World in a precise and relevant way. This draws in an identical classification of goods and facilitates worldwide commerce.
The main objective of HSN is to categorize goods from all over the World in a precise and relevant way. This draws in an identical classification of goods and facilitates worldwide commerce.
HSN Worldwide
The HSN scheme is accepted by more than 200 countries and economies for purposes such as:
- Uniform classification
- Base for their Customs tariffs
- Collection of international trade statistics
HSN number for each product is affirmed by most of the countries. The HSN number remains the same for almost all goods. Though, HSN number used in some of the countries varies little, based upon the kind of goods listed.
HSN in India
India is a member of the World Customs Organization (WCO) since 1971. It was basically using 6-digit HSN codes to analyze commodities for Customs and Central Excise. Succeeding Customs and Central Excise added two more digits to make the codes more accurate, appearing in an 8 digit analysis.
HSN importance under GST?
The purpose of HSN codes is to make GST precise and globally accepted.
HSN codes will remove the need to upload a detailed interpretation of the goods. This will save time and make filing easier since GST returns are automatic.
A dealer or a service provider must provide an HSN/SAC wise report of sales in his GSTR-1 if his turnover falls in the above slabs.
HSN - wise summary of outward supplies
Services Accounting Code (SAC) is used for classification of Services:
- 8 digit code of which first 2 digits is zero
Definition of SAC?
Service Accounting Code is related to the International HSN codes selected by other countries across the world. Similarly in GST the applicability of Service Accounting Codes has been determined for distinguishing the applicability of the individual tax rates to the services.
Importance of SAC?
SAC is the nomenclature adopted by the Goods and Services Tax Council for identifying services delivered under GST. These codes have been issued by the Central Board of Excise and Customs (CBEC) for the Identical classification of all the services as each service has been named a distinct SAC.
Work of SAC?
SAC Code is a labeling system for services formed by the Service Tax Department of India. Using GST SAC code, the GST rates for services are set in five slabs namely 0%, 5%, 12%, 18%, and 28%.
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