Goods and Service Tax, or GST, was introduced by the Indian government on July 1, 2017. As a result of GST, Central and State taxes were combined into one tax, which improved the ease of doing business and broadened the range of taxpayers. Manufacturers, traders, and service providers are required to register for GST under certain conditions. Based on the theme of One Nation One Tax, GST has tax slabs ranging from 0% to 28%.
Business entities whose turnover exceeds INR 40 Lacs (for Northeast and Hilly states 20 Lacs), need to get a new GST registration. However, there is still a limit of INR 20 Lacs for service providers. There are certain categories of taxpayers that need to register under GST, regardless of turnover, based on section 24 of the CGST Act 2017. Identifying the registration requirements and eligibility criteria up front is in the best interest of the company. There are ongoing compliance requirements, as well as penalties for non-compliance, so understanding the GST provisions is important.
It is possible to initiate the GST registration process online through the GST portal, Provenience can assist individuals and businesses with the GST registration process.
How important is GST registration?
- GST is now the only tax charged since July 1.
- State VAT taxpayers and Central Board of Excise and Customs (CBEC) taxpayers now file all taxes and share information via the GST platform.
- People who register at the GST portal receive a Goods and Services Taxpayer Identification Number (GSTIN) that is used for storing their tax history and details.
- In all administrative and compliance matters, this number would be used.
- Approximately 8 million taxpayers are expected to migrate from different platforms to GST.
Application of GST
All transactions involving goods and services are subject to the Central GST and the State GST, except those that are outside of GST’s scope or that are exempt. Even if no consideration was given, transactions between related persons and other activities of GST Schedule I will be considered supplies.
Imports and exports under GST
Under GST, exporters and importers are both required to register. An exporter who has registered as a taxable person and has paid IGST may claim a refund or export goods and services under a bond or letter of undertaking without paying IGST.
Scheme for composing small businesses
A composition dealer cannot collect the tax or take credit for inward supplies. Businesses with a turnover under 1.5 Cr. can pay GST Number on concessional rates.
Getting rid of the cascading effect
A taxation system’s primary objective is to eliminate cascading effects, i.e., no tax on taxes already owed. The cascading effect of taxes is one of the major distortions in Indian taxation. In GST, seamless credit, however, it has been eliminated completely.
Below is a step-by-step explanation of how to register for GST online on the GST portal:
- Visit the GST website.
- Click on the Registration tab and then click on the New Registration button
- You will need to fill out the new registration page with your business details, such as your legal name, PAN number, registered address, etc.
- Your OTP will be generated once you click the Proceed button.
- You will receive a Temporary Reference Number(TRN) once you enter the OTP. This number is important for the registration process.
FREQUENTLY ASKED QUESTIONS (FAQS)
What are the requirements for GST registration?
In the event that a supplier’s aggregate turnover in a financial year exceeds the threshold limit, he must register under GST in the state from which he supplies taxable goods and/or services
- All categories except service providers:
- A million and a half
- There are 20 lakh people in the North Eastern States, including Sikkim.
- If you are a service provider:
- There are 20 lakhs
- There are 10 lakh people in the North Eastern States, including Sikkim.
GST registration is compulsory, but what does it mean?
Depending on their turnover, some taxpayers are required to register compulsorily
- Taxable inter-state supply made by any person.
- Persons who are liable for tax because of their actions.
- Taxpayers under reverse charge are required to pay tax.
- Individuals who are not residents of the United States.
- According to Section 37 of the Act, a person must deduct TDS.
- Provides goods or services on behalf of other registered taxable persons, whether as an agent or otherwise.
- An input service distributor.
- Operators of electronic commerce who provide goods and/or services other than branded services.
- Operator in the electronic commerce industry.
- Providing services under a brand name or trade name.
- Notification may be given to any other person or group of persons
GST benefits: what are they?
A whole host of benefits are available to businesses as a result of GST
- Identifying the supplier legally
- An efficient and transparent taxation system based on international standards GST registration fees
- Due to GST, tax rates are uniform throughout India, making it one market.
- Tax compliance is simpler and fewer than under the previous regime
- A seamless credit will be provided for the supplier’s inputs. Tax liability is set off with the credit, which reduces liquidity crunches.
- Small businesses will benefit from a composition scheme by benefitting from competitive prices and reduced compliance burdens. Composition dealers only need to pay tax on the concessional tax rate.
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