GST implementation has turned into today’s reality as it has subsumed most of the indirect taxes into GST. GST follows the principle of “One Nation, One Tax” which means uniform tax rates all over India. Previously due to the various indirect taxes involved such as Vat, service tax, excise duty, etc., there were complications related to compliance which will reduce by the implementation of GST. GST is now applicable on supply but not on manufacturing, sale or provision of service. The system of GST is built in such a way that one can get setoff of the taxes paid on inward supply against the outward supply which shall keep the chain of tax credit intact.
Under the new tax regime, all the persons involved in the supply of goods and services are required to obtain GST Registration. Without obtaining GST registration one shall be allowed to claim ITC on the inward supply of goods and services.
1. A person is required to obtain GST Registration only if the aggregate turnover exceeds Rs. 40 lakhs*. However, in the case of northeastern states it is Rs. 10 lakhs.
1. For GST Aggregate turnover means all the supplies made by a taxable person on his own or behalf of the principal. Also in the case of a registered job worker, the work is done by the job worker on behalf of the principal shall not be included.
1. The person satisfying the above conditions are required to obtain GST Registration with 30 days of reaching the threshold limit.
· Migration from Old Law:
A person registered under previous laws of indirect taxes such as Vat, service tax, sales tax, excise, etc. which are subsumed by GST are compulsorily required to migrate to the GST and are required to obtain the registration from the appointed date i.e. 1st July 2017.
· Following persons are compulsorily required to obtain GST registration irrespective of the turnover:
1. Individuals registered under Pre GST-Regime (such as Excise, Service Tax, Vat)
2. Casual Taxable person
3. Individual whore turnover exceeds Rs. 40 lakhs*. However, in the case of northeastern states it is Rs. 10 lakhs.
4. The person making interstate supply
5. Those who are required to comply with the Reverse Charge Mechanism
6. Non-Resident taxable person
7. Input Service Distributor
8. E-Commerce Operator
9. Persons making the supply of online information and databases or any retrieval services from a place outside India to a person in India other than a registered taxable person.
Note: CBIC has notified the increase of threshold limit from Rs, 20 lakhs to rs.40 lakhs which will come into effect from 1st April 2019
· Exempted from GST:
1. Company registered under Section 8
2. The person dealing in the supply of goods and services which are wholly exempt.
3. The person involved in agricultural activity, cultivation activity related to soil.
Kindly note that GST Council has the complete authority to notify the persons who are exempt under GST
· Documents required for GST Registration:
GST registration is a PAN based registration which is done online. Thus based on One PAN multiple registrations can be obtained. The registration must be obtained within 30 days along with the soft copies of the following documents:
1. PAN Card of the applicant
1. PAN card and Aadhar card of all the directors/partner/ proprietor
1. Photograph of all the directors/partners/proprietors.
1. Address proof of the registered office such as any utility bill, Rent Agreement and NOC from the owner
1. Cancelled Cheque or Bank Statement.
1. Details of the goods and services in which the applicant is dealing
1. Certificate of incorporation in case of Company
1. Board’s Resolution authorizing any of the director or partner to handle the GST Registration on behalf of the Company/LLP.
1. DSC is compulsory only in case of company/LLP/partnership firm
· Penalty for not registering under GST:
An offender not paying taxes or making a short payment has to pay a penalty of 10% of the tax amount subject to a minimum of Rs. 10000/-
The penalty will be at 100% of the tax amount due when the offender has deliberately evaded paying taxes.
· FAQ’s on GST Registration:
1. What is GSTN?
All businesses who successfully get registered under GST are allotted a GSTIN No.
1. What are the types of GST Taxes to be implemented?
It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and/or services would be called the Central GST (CGST) and that to be levied by the States/ Union territory would be called the State GST (SGST)/ UTGST. Similarly, Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services.
1. Which authority will levy and administer GST?
Centre will levy and administer CGST & IGST while respective states /UTs will levy and administer SGST/ UTGST.
1. Do I have to register for GST separately for multiple businesses?
Yes If a business operates in more than one state then separate GST registrations are required for each state. For E.g. If a business is operating his business in Maharashtra & Gujarat, he has to apply for GST registration in both Maharashtra & Gujarat. Also, a business with multiple business verticals has to obtain separate registrations for each business vertical.
1. What is the Composition Scheme under GST?
Small businesses having turnover less than Rs. 1.5 crore (Rs.75 lakhs in northeastern states0 can opt for composition scheme. (Earlier this limit was Rs.1 crore which has been amended by CBIC and increased to Rs. 1.5 crore with effect from 1st April 2019)
In a composition scheme, the dealer has to pay taxes at nominal rates as notified by the department.
1. They are not required to file a monthly return and just have to file quarterly returns.
2. They cannot issue Tax Invoices
3. They cannot claim Input Tax Credit.
Composition Dealers is not applicable to:
1. Service providers
2. Inter-State Sellers
3. E-Commerce Sellers
4. Supplier of non-taxable goods
5. Manufacture of Notified goods