What is GST?

GST is an indirect tax that has replaced all the prevailing indirect taxes suitable until now. It is mainly a mixed form of all the other taxes which will cater for a single and streamline the method. After the introduction of GST, it essentially gives the thought of ‘One nation one tax’.The taxes are taxed at a single rate. The whole amount or accumulation, then divided between both Central and State governments in the title of CGST and SGST or IGST. This article will guide all about GST Registration

Who needs GST Registration?

• Any business entity whose aggregate turnover in a financial year exceeds Rs 40 lakhs (Rs 20 lakhs for special category states in GST).
• Note-This clause does not apply if the entity is only dealing in supply of goods/services which are exempt under GST,
• Every entity registered under an earlier law of taxation (i.e., Excise, VAT, Service Tax, etc.) needs to get register under Goods and Service Tax.
• Any entity or supplier dealing in inter-state supply of goods.
• 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
• A Person who supplies through E-commerce aggregator.
• Entities who are providing online information, acquiring database, or retrieval services from a place located outside India to a person in India, other than a registered taxable person

Certain businesses must file under GST. Carrying out business without filing is a crime and can lead to hefty penalties.

What are the Types of GST in India?

For GST administration, a model designed where the government (Central and State) have powers to impose and collect taxes through their respective legislations.

The Types of GST are Central GST, State GST, Integrated GST, and Union Territory GST. The details are given below:-

• Central GST: CGST imposed a tax on the Intra State supplies of goods and services by the Central Government. When the place of the seller and the buyer is in the same state it is termed as an Intra-state supply of goods or services. A seller to collect both CGST and SGST in which CGST remains with the Central government while the SGST collected by the State government.
• State GST: SGST is the tax levied on the Intra State supplies of goods and services by the State Government.
• Integrated GST: Integrated GST govern by the IGST Act, the seller collects IGST from the buyer, the tax collected, divided between the Central and State Governments.
• Union Territory GST: Union Territory GS applicable when any goods & services used in (UTs) of India, the revenue collected by the government of the union territory.

What are the Constituents of GST?

• Registration Number
• Legal Name and Constitution of business
• Trade Name
• Period of validity
• Types of taxpayer
• Date of Liability
• Signature of the applicant

What is the Structure of 5 Slabs Under GST?

GST regimes are made by considering all the layman and inflation rates in mind. To make it simpler and easier, the GST is structured following the four tiers structure. These four zones are given below, which are as follows-

• Zero Rates: Zero rate tax means – nil tax to apply on the goods and/or services.
• Lower Rate: Lower tax rate determines the 5% tax rate 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 tax rate under GST Regulation.

What are the Benefits of GST Registration

• Simplifies Taxation Services : GST has combined a number 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, taxes erased which has resulted in the reduction of the cost of goods and services.

• Helps In Avoiding Lengthy Taxation Services : GST Registration helps the small businesses in avoiding the lengthy taxation services. As the service providers with a turnover of less than 20 lakhs and goods provider with a turnover of less than 40 lakhs are exempt from paying the GST.

• Aimed At Reducing Corruption And Sales Without Receipts: GST, introduced with an aim of reducing corruption and sales without receipts. Also, it helps in reducing the need for small companies to comply with various indirect taxes.

• Uniformity In Taxation Process : GST Registration brings uniformity in the taxation procedure and allows centralized registration. This helps the businesses to file the tax returns every quarter through an online process.

• Minimizing Tax Evasion: With the introduction of GST, tax evasion minimized to a great extent.

• Higher Threshold For Registration: Earlier, in the VAT system, any business with a turnover of more than Rs 5 lakh was liable to pay VAT in India. The in-Service tax exempted service providers with a turnover of less than Rs 10 lakh. In the GST, the regime Threshold increased to Rs 20 lakh for a lot of small traders, service providers.

• Composition Scheme For Small Businesses : Under GST, small business under turnover of Rs 20 to 75 lakh can benefit as it gives an option to lower taxes by using the Composition scheme. This move has brought down the tax and compliance burden on many small businesses.

• Simple And Easy Online Procedure: The complete process of GST (from registration to filing returns) done online, and it is super simple. This has been advantageous for start-ups mainly, as they do not have to run from pillar to pillars to get diverse registrations such as VAT, excise, & service tax.

• Compliances Is Lesser In Number: Previously, there was VAT & service tax, each of which had its own returns & compliances. In GST, on the other hand, just one unified return to be filed.

• Regulations Of Unorganized Sector: In the pre-GST, 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 when the supplier has accepted the amount. This has brought accountability and regulation to these industries.

What is the fees for GST Registration

The ideal range varies from Rs. 1,000 to Rs. 3,000 based on the quality of service.

FAQ – Frequently Asked Questions

Can I apply for GST Registration online?

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 acknowledgment. A GSTIN will be generated on acceptance of the application and a temporary password and login will be sent. GSTIN is a unique 15-digit ID. A GSTIN Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland, and Tripura must get a GST registration if their supply turnover exceeds Rs. 10 lakh. As mentioned above, this threshold limit applies only to businesses that operate within their home state. A business that conducts trade with another state must seek registration regardless of turnover.

Is the GST threshold limit the same for all Indian states?

The exemption limit is a supply turnover of Rs. 20 lakh for businesses in all except for the Indian states in the northeast region. Businesses in Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland, and Tripura must get a GST registration if their supply turnover exceeds Rs. 10 lakh. As mentioned above, this threshold limit applies only to businesses that operate within their home state. A business that conducts trade with another state must seek registration regardless of turnover.

How would the composition scheme work under GST?

The composition scheme under GST would be applicable to businesses with a turnover of up to Rs. 50 lakh. Small businesses with turnover less than Rs. 1 crore* (Rs. 75 Lakhs for Northeastern states) can opt for a composition scheme. Such taxpayers would pay a fixed percentage of their turnover and cannot avail of the benefits of an input tax credit. Such businesses cannot collect taxes from their customers. The floor rate of tax cannot be less than 1%. *GST Council has decided to increase the limit to Rs. 1.5 crores but official notifications are awaited.

Composition dealers are required to pay tax based on their business types.

• They need to file only one return on a quarterly basis. Whereas normal taxpayers are required to file three returns on a monthly basis.
• Composition dealers cannot collect taxes from customers
• They cannot issue taxable invoices, i.e., collect tax from customers and are required to pay the tax out of their own pocket.
• No input tax credits can be claimed

Persons who are not eligible for the GST composition scheme include:

• Service providers (except restaurant owners)
• Non-taxable goods suppliers
• Sellers operating through an e-commerce platform
• Suppliers involved in the inter-state supply of goods
• Manufacturers of notified goods

Does GST apply to all businesses?

Yes, GST applies to all service providers, manufacturers, and traders. It extends to any dealers, bloggers, and writers, earnings from Google AdWords through PayPal, import-export businesses, all kinds of startups and companies, whether they are LLPs, proprietorships, partnerships, or private limited companies. It also applies, regardless of the threshold limit,

• Businesses operating outside their home state
• A business not registered to the state
• Businesses paying a reverse charge
• Input service distributor
• E-commerce operators
• Aggregators selling services under own brand name (Ola, for example)
• Online sellers
• Suppliers or agents

For a complete list of FAQs on GST Registration, please click here.

When to apply for multiple GST registrations?

• Under the GST regime, only one registration is allowed against one PAN. However, businesses, which operate in more than one state must have
• When a person runs a business in more than one state, then he must have a separate GST registration for each state.
• If the business has multiple verticals within a state, then the registration has to be done for each business vertical.

You can reach, Chartered Accountants on CA in Delhi‘s homepage to get started with GST Registration

Know more about Documents required for GST Registration of Company