GST has been introduced with effect from 1st July, 2017 which is one of the biggest tax reforms in the history of India. Goods & Service Tax is a comprehensive, multi stage, destination based tax which is levied on every value addition. With the introduction of GST, various indirect tax laws in India subsumed into a single law as such reducing compliance burden on the assesses and has also widened taxpayer base. GST is introduced as “One Nation One Tax” and it has various tax rates from 0% to 28%.
Under GST, the registration has been made compulsory for certain business entities irrespective of the turnover.
Turnover based registration limits are as below:-
For small business, registration is not compulsory up to a turnover limit as below:-
- In case of exclusive supply of goods by a business entity situated in Arunachal Pradesh, Manipur, Meghalaya, Manipur, Nagaland, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura & Uttarakhand:- Rs. 20 Lakhs
- In case of exclusive Supply of goods by a business entity situated in rest of India:- Rs. 40 Lakh
Composition of GST Registration through Multiple Stages
GST registration is mandatory (with Certain conditions) and if the entity or a private carries on business without getting the GST Registration, it’ll be treated as an offence under GST Act and heavy penalties are going to be levied. GST Registration is a web process and GST is imposed at every step of the availability network to line off all the available tax benefits.
Every product goes through multiple stages which incorporates the acquisition of basic materials, manufacturing, whole selling, and therefore the retailing the products, then the ultimate sale to the buyer for consumption/usage. during a nutshell, Goods and Service Tax is going to be levied on all of those 3 stages-
In a nutshell, every goods and services undergo multiple stages which include: –
(a) Purchase and manufacturing of Basic material,
(b) whole selling and retailing the products &
(c) final Sale to the buyer for Consumption.
GST registration is required within the following cases-
Threshold limit of aggregate turnover exceeds.
just in case of certain businesses, Compulsory Registration is required.
Voluntary Registration.
The GST is comprised within the final price of all the goods/services before its purchase that eliminates all the indirect taxes that are obligatory by the central government and therefore the government beforehand in India.
What are the advantages of GST Registration?
The advantages of GST Registration are as follows:-
Simplifies Taxation Services
GST has combined variety of indirect taxes under one umbrella and integrated the Indian market.
Reduction in Costs of Products & Services
With the introduction of GST, The cascading effect of a series of VATs and taxes has been erased which has resulted within the reduction of cost of products and services.
Helps in Avoiding Lengthy Taxation Services
GST Registration helps the tiny businesses in avoiding the lengthy taxation services. because the service providers with a turnover of but 20 lakhs and goods provider with a turnover of but 40 lakhs are exempt from paying the GST.
Aimed toward Reducing Corruption and Sales Without Receipts
GST was introduced with an aim of reducing corruption and sales without receipts. Also, it helps in reducing the necessity for little companies to suits various indirect taxes.
Uniformity in Taxation Process
GST Registration brings uniformity within the taxation procedure and allows centralized registration. This helps the companies to file the tax returns quarterly through a web process.
Minimizing evasion
With the introduction of GST, The evasion is minimized to an excellent extent.
Higher Threshold for Registration
Earlier, within the VAT system, any business with a turnover of quite Rs 5 lakh was susceptible to pay VAT in India. additionally, service tax was exempted for service providers with a turnover of but Rs 10 lakh. Under GST regime, on the opposite hand, this threshold has been increased to Rs 20 lakh, which exempts lot of small traders and repair providers.
Composition Scheme for little Businesses
Under GST, small business under turnover of Rs 20 to 75 lakh can benefit because it gives an choice to lower taxes by using the Composition scheme. This move has brought down the tax and compliance burden on many small businesses.
Simple and straightforward Online Procedure
the entire process of GST (from registration to filing returns) is completed online, and it’s super simple. This has been advantageous for start-ups mainly, as they are doing not need to run from pillar to pillars to urge diverse registrations like VAT, excise, & service tax.
Compliances is Lesser in number
Previously, there was VAT & service tax, each of which had its own returns & compliances. Under GST, on the opposite hand, there’s only one, unified return to be filed.
Regulations of Unorganized Sector
within the pre-GST era, it had been often observed that certain industries in India like building construction and textile were largely unorganized and unregulated. Under GST, however, there are provisions for online compliances and payments, and for availing of input credit only the supplier has accepted the quantity. This has brought in accountability and regulation to those industries.
What are the Eligibility Criteria for GST Registration?
The below mention person/entities are required to urge registered under GST –
Any business entity whose aggregate turnover during a fiscal year exceeds Rs 40 lakhs (Rs 20 lakhs for special category states in GST).
Note-This clause doesn’t apply if the entity is merely dealing in supply of goods/services which are exempt under GST,
Every entity who is registered under an earlier law of taxation (i.e., Excise, VAT, Service Tax, etc.) must get register under Goods and repair Tax.
Any entity or supplier dealing in inter-state supply of products.
Casual taxable person
A tax-payer under the reverse charge mechanism
Input service distributor and its agent
E-Commerce operator or aggregator*
Non-Resident taxable person
Agents of a supplier
an individual who supplies through E-commerce aggregator.
Entities who are providing online information, acquiring database, or retrieval services from an area located outside India to an individual in India, aside from a registered taxable person.
What are the Modes of GST in India?
For GST administration, a model was designed where the govt (Central and State) have powers to impose and collect taxes through their respective legislations. The Modes of GST are given bellow:-
Central GST
CGST is that the tax imposed on the Intra State supplies of products and services by the Central Government. When the place of the vendor and therefore the buyer is within the same state it’s termed as an Intra-state supply of products or services. Here, a seller has got to collect both CGST and SGST during which CGST remains with the Central government while the SGST is collected by the government.
State GST
SGST is that the tax levied on the Intra State supplies of products and services by the government.
Integrated GST
Integrated GST is governed by the IGST Act, where the vendor has got to collect IGST from the customer, and therefore the tax collected are going to be divided between the Central and State Governments.
Union Territory GST
Union Territory GST is applicable when any goods and services are utilized in the Union territories (UTs) of India and therefore the revenue is collected by the govt of union territory.
What is the Structure of Slabs Under GST?
GST regimes were made by considering all the layman and inflation rates in mind. to form it simpler and easier, the GST was structured following the four tiers structure. These four zones are given below, which are as follows-
Zero Rates
Zero rate tax means the – nil tax is to be applied on the products and/or services.
Lower Rate
Lower rate determines the five hundred rate which is applied on the CPI (Consumer Price Index) basket & mass consumption.
Standard Rate
Standard rate includes 12% & 18% of the tax rates.
Higher Rates
Higher rates tax includes 28% of the rate
What Documents are Required for GST Registration?
The documents required for the web GST Registration varies with the sort of business. T
he lists of documents required for Registration (based on the sort of business) are listed below:-
For a Sole Proprietorship Business
PAN card of the owner
Aadhar card of the owner
Photograph of the owner (in JPEG format, maximum size – 100 KB)
Electricity Bill and Rent Agreement (If rented property)
For a Partnership Firm
PAN card of all partners (including managing partner and authorized signatory)
Copy of partnership deed
Photograph of all partners and authorised signatories (in JPEG format, maximum size – 100 KB)
Address proof of partners (Passport, driver’s license, Voters card, Aadhar card etc.)
Aadhar card of authorised signatory
Proof of appointment of authorized signatory
within the case of LLP, registration certificate / Board resolution of LLP
checking account details*
Address proof of principal place of business**
For a HUF
PAN Card of HUF and therefore the Passport size Photograph of the Karta.
Id and Address Proof of Karta and Address proof of the place of business.
checking account Details
For a Public or Private Ltd.
Pan card of the corporate
Certificate of incorporation of Company
MOA and AOA of the corporate.
Identity Proof and address proof of all directors and Authorised signatory of the corporate.
Passport size photograph of the administrators and authorized signatory.
Copy of Board resolution passed for appointing authorized signatory.
Details of checking account opening.
Address proof of the place of business.