Goods and Services Tax (GST) was introduced on July 1, 2017, is a type of indirect tax. It is charged on supply of the goods and services all over the country. GST has incorporated the primary concept of " One Nation One Tax".
Businesses with exceeding the turnover of Rs. 40 lakhs (Rs. 10 lakhs for the North Eastern and hill states) must have GST registration as a normal taxable person.
For some businesses GST registration is mandatory. If any business functions without registering under GST, it will be an offence under the GST Act. The person will be charged with heavy penalties.
Businesses that need to get GST registration is given below:
- Individuals who were registered under the pre-GST law like VAT, Excise, Service Tax etc.
- Businesses with a turnover above the specified threshold limit of Rs. 40 lakhs (Rs. 10 lakhs for North -Eastern States, Uttarakhand, Himachal Pradesh and Jammu & Kashmir).
- Non-Resident taxable person.
- Casual taxable person
- Input service distributor and the Agents of the supplier.
- Taxpaying businesses or individuals under the Reverse Charge Mechanism.
- Individuals supplying through an e-commerce aggregator.
- All the e-commerce aggregator.
- Individuals supplying online information and retrieval services and database access from a place outside India to any person in India, other than a registered taxable person.
Features of GST Registration
Single Indirect Tax
The GST was introduced as a single and unified tax reform. It has also eliminated the existing indirect centre as well as the state taxes such as Value Added Tax, Customs Duty etc. The indirect taxes has made tax compliance easier for the businesses. It has also made many of the goods and services affordable for customers.
Input Tax Credit System
The input tax credit is one of the most prominent GST features in India. If a service provider or manufacturer has paid the input tax on purchase already, the same will be deducted from their output tax liability. the input and output invoices must be the same if the business wants to take the benefit of the tax credit. It will help in removing the cascading tax effect or the traditional tax regime. Moreover, it also reduces tax evasion.
GST Composition Scheme
Small and Medium Enterprises having an annual turnover up to the amount of Rs. 1 crore or Rs, 75 lakh in particular states can also voluntarily opt for the composition scheme. With the introduction of this scheme, the businesses can pay a fixed amount of GST rate of 1% on their turnover. It is up to the businesses to select from the composition scheme or the input tax credit.
Four-Tier Tax Structure
GST has got a four-tier tax system of 5%, 12%,18% and 28%. All the goods and services are taxed as per the tax structure. Many of the important commodities like the food items do not charge any GST.
Improved transparency with cheaper goods and services is the biggest advantage of this 4-tier structure. Though it has a long way to go, consumers, industries as well as the government has experienced the benefits that are expected to extend in the future.
Benefits of GST Registration
The benefits of GST Registration are as follows:
- The business is recognized legally as a supplier of goods or services.
- Proper accounting of the paid taxes on the input of goods or services can be utilized for the payment of GST. It is due to the supply of goods or services by the taxpayers.
- The taxpayers can avail various other benefits as well as a privilege under the GST laws.
- The tax rates are less under the composition scheme.
- It gave relief from the double taxation system.
- Improved logistics system by way of E-way Bill.
Procedure for GST Registration
The procedure that individuals need to follow to complete GST Registration are as follows:
Step- 1: Log in to GST portal- https://www.gst.gov.in
Step-2: Click on 'Register Now'.
Step-3: Choose 'New Registration'.
Step-4: Fill all the required details.
Step-5: Enter the OTP on the next page that was sent into your e-mail id.
Step-6: After entering the details click on 'proceed'.
Step-7: After this, you will get a TRN no( Temporary Reference Number). You need to prepare a note of the given TRN.
Step - 8: Move to the GST portal again and then click on ‘Register’ under the menu ‘Taxpayers’.
Step - 9: Choose the ‘Temporary Reference Number (TRN)’.
Step - 10: Enter the TRN on the next step along with the captcha details.
Step - 11: Then Click on ‘Proceed’ menu.
Step - 12: You will get an OTP on your email ID and also on the registered mobile number. Enter the given OTP on the next page.
Step - 13: The ongoing status of your application will be presented on the next page. On the right side, there will is an Edit icon, click on it.
Step - 14: There are 10 sections on the next page. Fill all the appropriate details and submit all the necessary documents.
Step - 15: Go to the ‘Verification’ page and then check the declaration. After that submit the application.
Step - 17: You can then finally check the status of the given ARN on the GST portal.
FAQs
- What is the penalty for not completing GST Registration?
If you fail to pay tax or pay a lesser amount than the due amount, the penalty that is charged is 10% of the due amount. The minimum penalty that is charged is Rs. 10,000.
If you are deliberately trying to evade the tax, the penalty that is charged is 100% of the due tax amount.
- How can you get your GST number?
To get your GST number you must apply for GST registration by visiting the GST portal(www.gst.gov.in). To start the process you also need to have a valid email address and mobile number and also a PAN for the business.
- Is it possible to surrender my GST number?
Yes, it is possible to surrender the GST number. However, this can be done after one year from the date of registration.
- What do you mean be ARN in GST registration?
ARN stands for Application Reference Number. It is the conclusive proof for submission of the application to the servers of GST.
- Is it possible to apply for GST registration online?
Yes, you can apply for GST registration by logging in to the portal site of GST.
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