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Goods and Service Tax (GST) is an indirect tax which is for India on the supply of products and administration. It could be a comprehensive multistage, goal based assess: comprehensive since it has subsumed nearly all the indirect taxes but few; multi-staged because it is forced at each step within the generation prepare, but is meant to be discounted to all parties within the different stages of generation other than the ultimate customer.
The following businesses require registering as per the requirements of the GST:
All Businesses-
Whose Taxable Turnover is more than Rs 20 Lakhs in case of the supply of services or 40 lakhs in case of the supply of goods. The yearly turnover of the business is taken for taxation of GST.
Interstate Outward Supply-
All businesses that make an interstate Outward supply of goods and services would have to compulsory consider the process of GST registration.
E-Commerce Entities-
Usually, e-commerce entities require considering GST registration. As per the recent notification e-commerce entities which have an annual turnover of lesser than Rs. 20 Lakhs per annum do not require to make any such registration.
ITC or input tax credit allows you as a business owner to pay lesser taxes on the inputs of a specific amount of products. The main benefit of paying input tax credit is to reduce your tax liability on the products.
So usually when a business buys some form of product, then a specific amount of tax would be paid when the product is received from a seller who is registered. When the business pays the specific amount of tax, the same can be added to taxes paid at the time of purchase. Hence ITC would allow the registered business to consider adjustments.
The Government has brought out different tax rates for GST registration process. These rates are likely to change as per the requirements of the government. A full list of the GST tax rates is present in the following link https://cbic-gst.gov.in/gst-goods-services-rates.html. The government levies the following rates:
Basic Necessities-
No Amount of GST tax is levied on necessities.
House Hold Necessities and Drugs-
A rate of 5% is charged on basic household necessities and drug applications.
Computer Products and Processed Food-
A rate of 12% is charged on computer products and other forms of processed foods.
Hair Oil, Capital Goods, Raw Materials and Other forms of Industrial Goods-
The rate of 18% is charged on consumer goods and capital goods which are used in different forms of industrial processes.
Luxury Items-
The rate of GST charged on Luxury Goods stands at 28%. Luxury goods can be cars and other forms of goods which fall under the category of goods classified as luxury.
The following Eligibility Criteria has to be sufficed by the business for GST Registration Process:
Type of Business-
Usually, every business that satisfies the primary eligibility criteria would have to go for the process of GST registration.
Pre-GST Law-
All entities that have been paying some forms of indirect taxes such as entertainment tax, sales tax and Octroi would have to go for GST registration.
Turnover Threshold-
All businesses which have a turnover of more than a specific amount would have to go for GST registration process. Usually, a business which carries out the supply of services requires more than Rs. 20 Lakhs per annum and business which carries out the supply of trading and products would have to have an annual turnover of more than Rs. 40 Lakhs.
Resident Status-
Every Casual Taxable individual or a Non-Resident taxable individual would have to go for the process of GST registration.
Agents-
Any form of input service distributor and the agent of a particular supplier would have to consider the process of GST registration.
Reverse Charge Mechanism-
Any business or individual that is paying some form of tax in the reverse charge mechanism form would also have to go for GST registration.
E-Commerce Entities-
Any form of E-Commerce entity would have to go for the process of GST registration. However, any entity whose annual turnover is lesser than Rs. 20 lakhs per annum would not have to register under GST.
E-Commerce Aggregators-
Every e-commerce aggregator must consider the registration of GST as a mandatory requirement.
Database Access-
Any form of individual or a company providing data base access or some form of streaming system to a person resident in India have to register as per the requirements of GST.
Login to the Website-
The applicant has to login to the following website https://www.gst.gov.in/. Then the applicant has to click on the services tab and click on GST Registration. After this, the applicant has to click on GST new registration. The applicant would be redirected to the portal, asking login information and details.
Fill in the Information-
In the next step, the applicant has to fill in the information requested. This will include the name of the business entity, entity type and pan information.
Include Email id and Mobile Number-
In the next step, the applicant must include information such as Email Id and Mobile number. All future communications would be received through the email id and the mobile number.
Generate Temporary Reference Number (TRN)-
Once all the information is inputted by the applicant an OTP (One Time Password) will be generated, and a TRN also would receive by the applicant. This TRN is known as the temporary reference number.
Input Details of Captcha-
In the next step, the applicant would be required to input details of the TRN and the Captcha image, which is shown. After this the applicant has to click on proceed.
GST Registration Page-
In the next step the applicant would be redirected to another page known as the GST registration page. The applicant must submit all information related to the business. This will include all business information. The Date of commencement of the business must also be included in this form.
Fill in Details-
All the information related to the promoters or directors must be provided. This would be in the case of a sole proprietorship concern. If it is a partnership firm then the information on the partners must be submitted. All the information related to the goods must be provided in the form. Any other additional place of business of goods must be provided in the application form.
Upload Required Documents-
The applicant must upload all the documents of the business.
Save and Receive ARN number-
In the final step the applicant has to save and submit the application to the concerned authority. The ARN number will be generated in the email and the SMS.
The CBIC has issued a notification that not filing of GST return by an entity would lead to strict penalties on the defaulter. Attachment of bank accounts of the defaulter would be one of the penalties incurred. Hence the applicant must file online mode of GST in appropriate form.
As per the CGST and SGST the penalty for non-compliance is Rs. 100 per day and a delay in such payment would lead to Rs. 200. According to section 122 of the CGST act non-compliance with the rules related to GST registration can attract strict penalties.
| GST Form | Filing Period | Due Dates |
|---|---|---|
| GSTR 7 | GSTR 7 Monthly | 10 of next month |
| GSTR 8 | Monthly | 10 of next month |
| GSTR 1 | Monthly | 11 of next month |
| GSTR 6 | Monthly | 13 of next month |
| GSTR 3B | Annual Turnover more than 5 crores- November 2020 | 20 of next month |
| GSTR 5 | Monthly | 20 of next month |
| GSTR 5A | Monthly | 20 of next month |
The following mandatory documents are required for GST registration:
Sole Proprietorship
Limited Liability Partnership
Private Limited Company
Frequently Asked Questions
Yes GST registration is mandatory for every business. The Government of India brought out the requirement of registration for businesses in India. Even businesses that utilised previous indirect taxation regime are required to follow GST registration.
Yes Micro, Small and Medium Enterprises have to register with GST. However, the basis of threshold would be considered for GST registration.
If a business operator has different forms of businesses operating in the country, then multiple GST registration can be considered. For example if the business is present in Delhi and Karnataka, separate state GST should be considered for both states.
Yes it is possible to obtain multiple GST registrations within one state. This would be possible for the business with different business verticals and products.
ARN is an abbreviation for application reference number. It is a conclusive proof that GST registration has been submitted to the GST portal.
Usually for the supply of services in a particular state, the threshold for GST would be 20 Lakhs. Businesses in Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland, and Tripura must get a GST registration if their supply turnover exceeds Rs. 10 lakh.
Composition Scheme would be applicable for specific businesses which have the turnover more than a particular amount. Usually businesses which have a turnover of more than 50 lakhs can make an application for the composition scheme. Such taxpayers would pay a fixed percentage of its turnover and cannot avail of the benefits of input tax credit.
GST return filing is a document which contains all the information related to the taxpayer. This document would indicate the tax liability which has to be paid by the tax payer. The following details would be present on GST Return filing:
GSTIN is an identification number. Such number is considered as a unique identification number for verification. This number is allocated to the applicant to utilise the same in the portal.
GSTN is an abbreviation for Goods and Services Tax Network. It is a form of a section 8 company which is incorporated for non-for-profit. Such organisation provides smart solutions for the GSTN network for indirect tax requirements.
When a company goes for the process of GST registration, then this form of business would be required to carry out GST registration. E-commerce companies have to mandatorily carry out the processes and procedures related to GST registration. Hence B2B businesses would also be required to comply with the above requirements.
Casual taxable individuals are entities that do not have a specific place of business. Usually such businesses would be taking other forms of business such as supply of services and act as a form of a middleman.
Yes there are specific businesses that do not require to file GST returns:
Reverse Charge is a mechanism where the receiver of the goods is liable to pay the form of GST. This is usually the case, where the receiver is not a registered user under the system of GST.
Yes for exports a specific amount of IGST would be taxed. A specific amount of zero tax rates would be applicable for exports.
This would be the total amount of taxable income which is liable to be considered for the purposes of calculating the total amount of GST. This would be considered for the business for the rate of calculation of GST.
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