Everything you need to know about GST
In this article, we cover the following topics
- What is GST?
- When GST Registration mandatorily required?
- GST Required irrespective of turnover
- Who should get GST Registration?
- Benefits of GST Registration
- What are the documents and details required for GST Registration?
- GST Registration Process
- Is there any penalty for not registering under GST?
- What is GSTIN? - Know your GSTIN
- When a business needs multiple GST Registration?
- What is GST Composition scheme? when should a business opt for it?
- Benefits of GST Composition scheme
- Disadvantages of composition scheme
- Who can not opt for GST composition scheme?
- What are the compliances after GST Registration?
- How does GST Certificate look like?
- How to check the validity of business whether registered under GST or not?
- What to do if GST Registration is applied by mistake?
What is GST?
GST stands for Goods and Service Tax. This is a unified indirect tax which is implemented from 1st July 2017 in India.
Fundamentally, the indirect tax is a tax levied on goods and services rather than income and profits.
The government collects the tax on the sales made by businesses and businesses collects the tax from their customers indirectly while charging the same taxon Invoice. Learn how to raise a tax invoice .
GST is chargeable whether you are selling goods or service or both.
When GST Registration mandatorily required?
- If your annual turnover exceeds INR 40 Lakhs. In the case of North Eastern States, GST registration required when your turnover exceeds INR 20 Lakhs
- If you are selling goods outside the State in which you’re located (Inter-State trade), irrespective of turnover.
- If you are selling your product over e-commerce platform such as Amazon, Flipkart, Snapdeal, etc
- If you are Importer or exporter
- If you want to raise a tax invoice for your customers
- If business participating in exhibition/event outside the State as Casual Taxable Payer.
GST Registration required irrespective of the turnover
- Inter-State Trade
- Casual Taxable Person
- Non-Resident Taxable Person
- Agent of a supplier
- In case Reverse Charge Mechanism applicable
- Input Service Distributor
- E-Commerce Operator and aggregator
- The business supplying online information and database access or retrieval services from a place outside India to a person in India
Who should get GST registration?
Despite aforesaid mandatory provisions, GST Registration can be applied voluntarily. GST registration not only helps you in getting your business recognized as a legal registrant but also opens a number of opportunities for your business
Benefits of GST Registration
- Become more competitive – Your business will be more competitive in comparison to your unregistered competitors since you will carry valid tax registration i.e. GSTIN.
- Expand your business Online – You cannot sell products or services on an e-commerce platform without GST registration. If you’re planning to give a blow on an e-commerce platform like Flipkart, Amazon, Paytm, Shopify or through your own website, you must need a GSTIN.
- Can avail input tax credit – Only Registered GST holders can avail input of GST tax paid on their purchases and save the cost.
- Can sell all over India without any restrictions – Without having GSTIN you cannot trade inter-state. This is possible only if you registered your business under GST.
- Apply to Government Tenders – Various government tenders requires GSTIN to apply tender. If you don’t have you may miss the business opportunity.
- Can Open Current Bank Account – Especially, in case of sole proprietor business Banks & Financial Institution do not open a current bank account in the name of business trade name unless you carry any government proof in the name of your business GST registration certificate can help you to open a current bank account?
- Dealing with MNCs – Generally, MNC’s does not deal with small business entities until they carry valid tax registration proof.
What are the details and documents required for GST registration?
The documents required depends upon the type of business you are running as. Following below documents required for GST Registration: -
- Passport Size Photograph
- Aadhar card or Passport or Driving License
- Pan card of business entity
- Address proof of business premises
- Bank Statement or Cancel cheque or Passbook
ADDITIONAL DOCUMENTS FOR PRIVATE LIMITED COMPANY /LLP /OPC / PARTNERSHIP FIRM
- Certificate of Incorporation in case of Company, OPC or LLP
- Partnership Deed in case of partnership firm
GST Registration Process
Our professional can assist you in filing GST registration application error and hassle-free. For this you must follow the below process:-
- Arrange aforesaid specified documents based on your business entity.
- Choose a package based on your requirement.
- Upload your information & documents on our web portal.
- Our professional team verify your documents. In case there any discrepancy our team will connect and assist you to collect prompt documents.
- On successful verification of documents. Our team will apply your GST registration application on Government GST portal and provide ARN within 3 working days.
- Our team will track your application on a regular basis & provide you GST certificate when issued from government end.
Is there any penalty for not registering under GST?
If any business entity mandatorily required to register under GST, however, failed to apply or intentionally ignoring the same then the business is liable to pay the penalty of 100% of the tax due or INR. 10,000 whichever is higher
What is GSTIN?
GSTIN stands for Goods and Service Tax Identification Number. This will be get generated from the government end when you have successfully applied for GST registration.
When a business needs multiple GST registrations?
- If a business entity doing supplying goods and services from multiple States, then he/she mandatorily required to register under GST in different States.
- Further, any business entity can apply for multiple GST registration even if they are operating from a single State under multiple verticals to avoid accounting complexity between multiple businesses.
XYZ Private Limited doing the business of selling merchandise and also doing the business of selling software from Bangalore only. Still, the company can apply for multiple GST Registration for their different business domain
If you are supplying goods and services from one state to all over India. You do not need multiple GST registration.
What is GST Composition scheme and when should a business opt for it?
GST Composition Scheme is an easy scheme made for the taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover.
Any business having an annual turnover less than ₹1.5 Crore* can opt for composition scheme under GST registration application.
*For Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim and Himachal Pradesh the above threshold limit is ₹75 lakhs.
The above threshold limit for GST Composition Scheme has been announced on 32nd GST Council Meeting held.
The benefit of GST Composition scheme
- Need to file a single quarterly return. Four returns in a year
- Limited compliances
- Less tax liability
- Pay a small amount of tax on turnover
Type of business
1% of turnover
5% of turnover
- Not require maintaining detailed records
- Can provide auxiliary services up to ₹ 5 lakhs annually under the composition scheme.
Disadvantages of GST Composition scheme
- Cannot avail input tax credit of purchases made
- Cannot issue a tax invoice
- Cannot charge composition tax on an invoice from the customer as usual practice in case of normal GST scheme
Who can NOT opt for composition scheme?
The following individuals cannot opt for the GST composite scheme:-
- If Annual turnover exceeds 2 Crore
- If you involved in Inter-State supplies
- All Service Sector Business except restaurant
- Importer of goods & services
- E-commerce sellers
- Supplier of non-taxable goods
- Manufacturer of Notified Goods
GST Composition Scheme for Service providers
At the 32nd GST council meeting, the New GST composition scheme was introduced for the services sector and the mixed supplies of goods and services.
- In this scheme, the threshold limit for GST Registration is kept at ₹50 lakhs.
- The GST tariff rate has been set @ 6%, which would break up as:- 3% CGST + 3% SGST,
What are the compliances after GST Registration?
- Raise GST Invoices - After GST registration, every business requires to raise Tax Invoice on every sells of goods and services.
Learn how to raise Tax Invoice
- GST Return filing - after the GST Registration, businesses have to file the GST Returns on time If you are registered under the regular GST scheme, then you have to file the return monthly or quarterly on regular basis. If you are registered under the composition scheme, you have to file the GST return on a quarterly basis with some conditions.
Learn more about GST return filing
- Payment of Tax - Pay taxes on a monthly/quarterly basis based on monthly/quarterly invoices raised to customers.
Download guide how to pay GST tax online
How to check the validity of business whether registered under GST or not?
- Visit GST portal
- Click on search taxpayer
- Type GSTIN & click on search to find out the validity or genuineness of the business
What to do if GST registration is applied by mistake?
You can surrender your GST Registration by submitting the application under Form GST REG-16. Learn more how to cancel GST registration.
Voluntary Registration can be surrender only after the expiry of 1 year. Migration case can be surrender anytime.
Some Relaxations by the GST Department:
Here are some of the recently introduced by the GST department to the general taxpayers:
- GST council has simplified the annual GST return forms, by making some of the fields in these forms optional.
- GST rates have been simplified for several services at the 37th GST Council meeting.
- GST rates on many goods have been reduced in the 37th GST Council meeting.
In case you still have any doubts regarding GST registration you may consult our business advisors at 8881069069.
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Hey.., Thanks for the good information....
DEAR SIR pls help me i nead a gst no