GSTIN stands for Goods and Services Tax Identification Number. It is a unique 15-digit number assigned to every taxpayer registered under the GST regime in India. The GSTIN is used to identify taxpayers and to track their transactions.
The GSTIN is structured as follows:
- The first two digits represent the state code.
- The next ten digits are the PAN card number of the taxpayer.
- The thirteenth digit is an entity code used to distinguish between different types of taxpayers.
- The fourteenth digit is a fixed alphabet ‘Z’.
- The fifteenth digit is a check digit, which is used to verify the accuracy of the GSTIN.
What is the GSTN (Goods and Service Tax Network)?
The Goods and Services Tax Network (GSTN) is a non-profit, non-government organisation that provides the shared IT infrastructure and services to the Central and State Governments, taxpayers and other stakeholders to implement the Goods and Services Tax (GST) in India.
The GSTN is responsible for developing and maintaining the GST portal, which is the online platform that taxpayers use to register for GST, file returns, and make payments.
The GSTN also provides several other services, such as:
- E-invoicing
- E-way bill
- Input tax credit reconciliation
- GST compliance reporting
The GSTN is a critical component of the GST system in India. It provides the IT infrastructure and services that enable taxpayers to comply with the GST laws and the government to administer the GST system.
What is a GST Certificate?
A GST certificate is a document issued by the Government of India to a taxpayer or entity that has registered under the GST system. It is proof of registration and authorises the taxpayer to collect GST from customers on behalf of the government.
The GST certificate contains the following information:
- GST Identification Number (GSTIN)
- Name of the taxpayer
- Address of the taxpayer
- Date of registration
- Type of registration (regular, composite, or non-resident)
- Business category
- Signature of the authorised officer
Components of GST
The components of Goods and Services Tax (GST) in India are:
Central Goods and Services Tax (CGST)
This is levied by the central government on all intra-state and inter-state supplies of goods and services. The CGST rate is the same for all states and union territories.
State Goods and Services Tax (SGST)
This is levied by the state government on all intra-state supplies of goods and services. The SGST rate varies from state to state.
Integrated Goods and Services Tax (IGST)
This is levied by the central government on all inter-state supplies of goods and services. The IGST rate is the sum of the CGST and SGST rates.
Union Territory Goods and Services Tax (UTGST)
This is levied by the central government on all supplies of goods and services made within a union territory. The UTGST rate is the same as the SGST rate.
Who Needs a GST Registration Service?
- Any individual or business entity that carries out taxable supplies of goods or services
- Annual turnover of the business exceeds the prescribed threshold limit (currently ₹20 lakhs for most businesses)
- E-commerce operators that facilitate the supply of goods and services through their platform
- Non-resident taxable persons who occasionally supply goods or services in India
- Businesses that are involved in inter-state supply of goods or services
- Input service distributors who distribute input tax credit to their branches or units
- Casual taxable persons who supply goods or services occasionally in India
- Businesses that were previously registered under the old tax regime (VAT, Service Tax, etc.) and have migrated to GST.
Objectives of GST
The objectives of the Goods and Services Tax (GST) in India are to:
Create a unified and simplified tax system
GST is a single tax that replaces multiple indirect taxes levied by the central and state governments. This makes it easier for businesses to comply with tax laws and reduces the cost of doing business.
Eliminate the cascading effect of taxes
The cascading effect of taxes occurs when a tax is levied on a product or service that already includes other taxes. This can lead to higher prices for consumers. GST eliminates the cascading effect of taxes by allowing businesses to claim input tax credits on the taxes paid on their inputs.
Promote economic growth and development
GST is expected to boost economic growth and development in India by creating a single market for goods and services. This will make it easier for businesses to trade across state borders and will lead to lower prices for consumers.
Increase tax revenue
GST is expected to increase tax revenue for the government by widening the tax base and reducing tax evasion. This will help the government to fund essential public services.