Introduction of GST
Before going to the best GST Implementation for the Marketplace we need to know what is GST?
GST stands for Goods and Service Tax, it was launched on 1st July 2017 in India by the president of India. GST is imposed in order to remove the indirect taxes and to implement only one tax that is GST means One Nation, One Tax.
VAT vs GST
Earlier VAT (Value Added Tax) was implemented on the products but it increases the value of the article at every stage of the supply chain. That’s why GST was implemented to remove the additional charges on products.
The VAT was also removed because of different VAT rates and laws in every state. Whereas GST is a single unified tax that uses a destination-based taxation concept.
Features of GST
- Three types of taxes – IGST, CGST, and SGST.
- GST is based on Destination based consumption of tax.
- GST is not applied to alcohol for human consumption.
- Five petroleum products namely – Crude, Petrol, Diesel, ATF and Natural Gas on which GST is applicable.
- Seamless credit across the entire supply chain in all states.
GST Terminologies
- CGST – It is a tax levied on Intra State supplies of both goods and services by the Central Government. In CGST the tax revenue is meant for the central government.
- SGST – Tax levied on Intra State supplies of both goods and services by the State Government. In SGST the tax revenue is meant for the state government.
- IGST – Tax levied on all Inter-State supplies of goods and/or services.
- GSTIN – It is a 15-digit unique code provided to every person who is registered under GST.
Importance of GST in the eCommerce Industry
E-Commerce means dealing with goods and services by using internet services the vendors create post their products on the online store to sell them then GST comes into play.
As from the creation of the product to the delivery of the product to remove the additional taxes GST is very for the customers. Now the customers need to pay only a single tax that is GST.
GST resultant in reducing the paperwork and helps the businesses to enhance their efficiencies.
Why Implement GST on the Marketplace?
GST Implementation is important for the marketplace as the marketplace consists of multiple vendors and their products to sell them online and every seller may have their own shipping services and delivery charges.
- The government of India has set a limit for the revenue amount of all the business and once that limit is crossed then the GST registration is a must for that business.
- The government has also launched a composition scheme, under that scheme the small and medium businesses need to file their return quarterly instead of monthly.
- The marketplace seller has to file monthly return under GST to claim credit for the tax collection at source by the Marketplace owner.
Why We have implemented GST on Magento 2 Marketplace?
We have implemented GST on the Magento 2 Marketplace so that the store owner, as well as the vendors, can set up the Indian GST Structure to the marketplace tax system.
