GST Registration for Hindu Undivided Family is beneficial in multiple ways. Many companies under HUF Registration do eCommerce business. Therefore, they also mandatorily require GST Registration. Furthermore, Hindu Undivided Family companies can claim input tax credit after getting GST Registration. In this article, we will understand GST Registration for Hindu Undivided Family in detail.
What is a Hindu Undivided Family?
A HUF is a group of people who are all linearly derived from the same ancestor, as well as the spouses and children of the male descendants. It is made up of the karta, who is usually the family’s oldest member or leader, and encapsulates, who are younger family members.
The karta is in charge of the HUF’s day-to-day operations. Sons and Daughters are HUF co-owners with their father. When a daughter marries, she will become a part of her husband’s HUF while remaining a stakeholder of her parent’s firm. HUFs can be formed by Jain, Buddhist, or Sikh families too.
In other words, An HUF is deemed a “person” under section 2(31) of the Income-tax Act, 1961, and is thus regarded as a distinct entity for tax purposes. Families who possess ancestral homes and enterprises generally establish a separate Permanent Account Number (PAN) in the HUF’s name.
What is GST?
GST stands for goods and service tax. It is an indirect tax that has to be collected from customers when you sell your goods or services and is required to be submitted to the government.
It is compulsory to register under GST when annual turnover exceeds INR 40/20 lakh or supply goods and services inter-state or through an E-commerce platform.
The Types Of GST Registration In India are basically four. Tax rates vary from 0% to 28% depending on the type of goods & nature of the services you are selling.
Benefits of GST Registration for Hindu Undivided Family
There are several benefits of GST Registration for Hindu Undivided Family and other firms as well. The most valuable benefits that you must know are as follows.
- GST Registration provides a competitive advantage over unregistered competitors.
- You can’t sell goods or services on an e-commerce site until you’ve registered for GST. You’ll need a GSTIN if you want to sell on an e-commerce platform like Flipkart, Amazon, Paytm, Shopify, or your own website.
- Only registered GST users can use the GST money collected on their purchases as input and save money.
- You can’t trade between states unless you have a GSTIN. This is only feasible if your company is GST registered.
- GST Registration for Hindu Undivided Family permits you to apply for government tenders easily.
- In general, multinational corporations (MNCs) are hesitant to work with small businesses unless they can show documentation of appropriate tax registration. Thus, GST Registration helps in getting foreign clients as well.
Documents Required for GST Registration for Hindu Undivided Family
- PAN Card of the Business or Applicant
- Identity and Address Proof of Promoters
- Address Proof for Place of Business
- Bank Account Proof
- Photos of Stakeholder
- Digital Signature Certificate
Download E-Startup Mobile App and Never miss the latest updates narrating to your business.