Theory and Practice of GST

Flashcards for reviewing key concepts from the 'Theory and Practice of GST' lecture notes, focusing on definitions, processes, and regulations.

What is Goods and Services Tax (GST)?

A comprehensive tax levied on goods and services utilized in an economy, imposed at every level of production-distribution, with set-offs for taxes remitted at earlier stages.

What are the benefits of GST?

Removes cascading effect of taxes, abolishes varied taxes/rates/exemptions, reduces production costs, implements uniformity, delivers clarity, and increases company growth.

What determines the place of supply of goods?

Location where goods are sent for delivery, import of goods or services/SEZ goods, installation/assembling location, or location where goods are taken on board.

What is a debit note?

A document issued by the seller to increase the value of goods/services supplied, especially in cases of purchase returns, including details like price, discount and tax charged.

What is a credit note?

A document issued by the seller to reduce the value of goods/services supplied, especially in cases of sales returns, including details like price, discount and tax charged.

What is a tax invoice?

Issued by registered businesses for taxable supplies of goods/services, it is a tax nature invoice that includes both product and tax details.

What is a bill of supply?

A document showing transaction details but not tax details, it is a non-tax nature invoice that includes product details only, applicable for exempted or composition sales.

What returns do composition dealers need to furnish?

Form GSTR-4 for all outward supplies (quarterly) and Form GSTR-9A for consolidated annual details.

What is the input tax credit (ITC) mechanism?

It claims GST credit paid on purchases for business use, excluding personal use or exempt supplies, allowing ITC only for registered persons making taxable or zero-rated supplies.

What are the payment modes of tax under GST?

Online (internet banking, credit/debit card, NEFT/RTGS) and offline (cash up to ₹10,000, cheque/DD via OTC).

What are the various taxes under GST?

Central Goods and Service Tax (CGST), State Goods and Service Tax (SGST), Integrated Goods and Service Tax (IGST), Union Territory Goods and Service Tax (UTGST).

What is the transition to GST?

The process of shifting or registering a business from existing tax laws to GST to consolidate multiple taxes.

How is GST started in Tally.ERP 9?

It is used by registered businesses to maintain accounting books according to GST compliance, stores customer/supplier details, avails input tax credit at invoice level and generates accurate GST reports.

What is intra-state supply of goods?

Transactions where the supplier and recipient belong to the same state or union territory.

What is inter-state supply of goods?

Transactions where the supplier and recipient are located in different states.

What is 'return of goods'?

Return of goods by the recipient for reasons such as damaged or wrong products, split into purchase returns (recorded in debit notes) and sales returns (recorded in credit notes).

What is the hierarchy of applying tax details?

It allows defining tax rates at the company level and modifying it at stock group, stock item, accounting ledger, or individual transaction levels.

What is a GST report?

A summary of monthly, quarterly, or annual returns, including details of inward and outward supplies filed by a taxable individual.

What are GSTR-1 and GSTR-2?

GSTR-1 is a monthly return for outward supplies, while GSTR-2 is for inward supplies.

Who is a composite dealer?

A dealer with turnover less than ₹1.5 crores, eligible for composition scheme but with restrictions on input tax credit.

Who are unregistered dealers (URDs)?

Dealers with turnover below the registration threshold cannot issue tax invoices or claim input tax credit.

What are exports?

Output of goods outside the country where the location of the supplier and the recipient are in different countries.

What are imports?

Purchase of goods from another country, subject to reverse charges and integrated tax payment by the recipient.

What are SEZ sales?

Sale of goods or services in special economic zones attract integrated tax and requires sales voucher records.

What is a mixed supply?

Combination of two or more goods/services supplied together for a single price, where each item can be supplied separately.

What is a composite supply?

Combination of goods/services naturally bundled and supplied together, where one item is the principal supply.

What is Challan Reconciliation?

Payment details of GST tax payment vouchers, to be reconciled and with the chance to define left details.

What is an electronic cash ledger?

A ledger used to credit tax deposits, debited for tax, interest, or penalty payments.

What is an electronic credit ledger?

A ledger used to credit input tax credit claims, debited for utilizing credit to discharge tax or refund claims.

What are Recording of Advanced Entries?

It includes all those entries or transactions which were non recorded or may be advanced in nature in Tally.ERP 9.

What is GSTR-9?

a monthly return which also contains the details of ITC availed and GST paid and includes local and inter-state transaction as well as exports and imports.