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Who is liable to pay GST, and how is it calculated?

11-Mar-2023
GST

Answer By law4u team

In India, GST (Goods and Services Tax) is a destination-based consumption tax, which means that it is ultimately borne by the end consumer of goods and services. However, GST is collected and paid by businesses throughout the supply chain, and they can claim a credit for the GST paid on their purchases (input tax credit) against the GST collected on their sales (output tax). The following entities are liable to pay GST: Registered Taxable Persons: Businesses whose turnover exceeds the GST threshold limit of Rs. 40 lakhs (Rs. 20 lakhs for special category states) are required to register for GST and are liable to pay GST. Casual Taxable Persons: Persons who occasionally supply goods and services in a taxable territory but do not have a fixed place of business in that territory are required to register as a casual taxable person and are liable to pay GST. Non-Resident Taxable Persons: Non-resident persons who supply goods and services in a taxable territory are required to register as a non-resident taxable person and are liable to pay GST. Tax Deductors: Certain businesses, such as government agencies and large corporations, are required to deduct GST at the time of making payments to suppliers, and are liable to pay GST on behalf of the suppliers. The calculation of GST is based on the value of the goods or services supplied and the applicable GST rate. The GST rate applicable to a particular good or service is determined by its classification under the four GST rate slabs (5%, 12%, 18%, or 28%). For example, if the value of a good is Rs. 1,000 and the applicable GST rate is 18%, then the GST payable on the good would be Rs. 180 (18% of Rs. 1,000). The total price of the good, including GST, would be Rs. 1,180.

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