GST or Goods and Services Tax was introduced by the Indian Government to regulate prices throughout the country and remove all state or central Government imposed indirect taxes on goods and services by initiating GST registration in India. As per the recently amended notification in 2019, businesses whose turnover exceeds Rs.40 lakhs (Rs. 20 lakhs for North East and hill states) is required to get their GST as a normal taxable person and hence needs to mandatorily apply for GST Registration. Apart from the above turnover bracket, there are certain instances where GST registration is mandatory for those individuals or entities who are engaged in the supply of goods or services across the state. You can apply for online GST Registration either as a normal taxpayer or under the GST composition scheme. Taxpayers with a turnover of less than Rs.1.5 crore can opt for composition scheme to get rid of monotonous GST formalities and pay GST at a fixed rate of turnover.The procedure for GST is entirely online and requires no manual interference.Once the registration is done under GST, you will get a unique GSTIN (Goods and Service Tax Identification Number). The Central Government issues a state-wise, 15-digit number to you once the registration is done. There are several advantages of GST registration including the fact that you will get a legal identity as a supplier. Furthermore, you can also getan input tax credit and collect GST from the final recipients of goods and services.
GST provides benefits to the citizens of India, the industry as well as the government. Some of the advantages of GST Registration are:
One of the major benefits of GST is the elimination of numerous indirect taxes that existed earlier. Now, many taxes have been replaced. Taxes including excise, octroi, sales tax, Service tax, CENVAT, turnover tax etc. are no more applicable and all those have come under common tax called GST.
GST took the thought of “One Nation One Tax”. The unhealthy competition that existed earlier among the States has benefited businesses wishing to do interstate business.
Application of GST has resulted in the elimination of double charging in the system for a common man. Due to GST, the price of goods and services has reduced & ultimately helping the common man saving more money.
GST is applicable at all stages, right from manufacturing to consumption, it is providing tax credit benefits at every stage in the chain. In the earlier scenario, at every stage, the margin used to get added and tax was paid on the whole amount. Under GST the businesses are taking benefit of Input Tax Credit and tax is being paid on the amount of value addition only. GST has reduced the cascading effect of tax thereby reducing the cost of the product.
Since GST has reduced the cost of products, the demand, for some – if not all, products have increased. With the increase in demand, to meet the increase in supply, the employment opportunitieshave started showing positive graph.
Higher the demand, higher will be the production. This ultimately results in a higher Gross Domestic Product (GDP).
Goods and services tax is a single tax that includes various earlier taxes and has made the system efficient with fewer chances of corruption and Tax Evasion.
For many capital goods, input tax credit is not available. Full input tax credit under GST will mean a 12-14% drop in the cost of capital goods.
Following is the list of documents which are required for registration of GST for various business:
PAN Card and address proof of proprietor
The following can be shown as proof of a director: –
The step-by-step procedure that individuals must follow to complete GST Registration is mentioned below:
Penalty for not completing GST Registration
If you do not pay tax or pay a lesser amount than what is due, the penalty that is levied is 10% of the due amount (in case of genuine errors). However, the minimum penalty is Rs. 10,000.
If you have not registered for GST and are deliberately trying to evade tax, the penalty levied is 100% of the due tax amount.
It provides creditability to business in the eyes of financial institutions, suppliers and potential clients. As it makes easier for companies to get loans at favorable terms from banks or convincing potential clients while entering into deals .
All businesses that successfully register under GST are assigned a unique Goods and Services Tax Identification Number also know as GSTIN.
If a business operates from more than one state, then a separate GST registration is required for each state. For instance, If a sweet vendor sells in Karnataka and Tamil Nadu, he has to apply for separate GST registration in Karnataka and TN respectively.
A business with multiple business verticals in a state may obtain a separate registration for each business vertical.
Small businesses having an annual turnover less than Rs. 1 crore* ( Rs. 75 Lakhs for NE States) can opt for Composition scheme.
GST Council decided to increase the limit to Rs. 1.5 crores but notification is awaited.
Composition dealers will pay nominal tax rates based on the type of business:
Composition scheme is not applicable to :
This scheme is a lucrative option for all SMEs who want lower compliance and lower rates of taxes under GST.
A GST taxpayer whose turnover is below Rs 1 crore* can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the present limit is Rs 75* lakhs. Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.
* Limit is raised to Rs. 1.5 crores after decision taken by the GST Council. However notification is awaited.
Learn the Rules about Composition scheme & Know the pros & cons of being a composition dealer.
Obtain GST registration and file CMP-02 to opt in for the scheme.
For normal registered businesses:
Yes, you can apply for GST Registration online. You can simply register your business on the official GST portal and then scan and upload all the required documents. You will then receive an acknowledgement. A GSTIN will be generated on acceptance of the application and a temporary text and login will be sent. GSTIN is a unique 15-digit ID.
The validity of GST certificate is forever. It is just a one-time certificate.
The primary authorised signatory is the person who is primarily responsible for performing an action on the GST System Portal on behalf of the taxpayer.