GST refers to Goods and Services Tax which subsumes all taxes such as Sales tax, Service tax, Excise duty etc. into GST. GST registration is required primarily if your annual sales are more than Rs. 20 Lakh. Even if your sales are less than Rs. 20 Lakh, we suggest that you voluntarily opt for GST registration because:
- You will not get any tax refunds on purchases (e.g. if you buy goods worth Rs 1 lakh in a year, and tax rate is 28% – you will lose tax refund of Rs. 28,000).
- You cannot sell outside your state
GST registration typically takes between 2-6 working days. You need to file your application with the department and sign it with your digital signature.
Some Important Points
Who should register for GST?
Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
Businesses with turnover above the threshold limit of Rs. 20 Lakhs (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)
Casual taxable person / Non-Resident taxable person
Agents of a supplier & Input service distributor
Those paying tax under the reverse charge mechanism
Person who supplies via e-commerce aggregator
Every e-commerce aggregator
Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person
Who is exempted from requirement to get GST Registration?
GST Registration is not mandatory for persons who:
Supply agricultural produce from cultivation.
Make only exempt supplies (Nil Rated or Non-Taxable supplies) of goods or services.
Make supplies which are entirely covered under reverse charge.
Can a person get voluntarily registered under GST even though he is not liable?
Yes, a person can get registered voluntarily under GST in terms of sub-section (3) of section 25. All the provisions will apply to him as they apply to a registered person.
What is GSTIN?
All businesses that successfully register under GST are assigned a unique Goods and Services Tax Identification Number also know as GSTIN.
When should a business apply for multiple GST registrations?
If a business operates from more than one state, then a separate GST registration is required for each state. For instance, If a sweet vendor sells in Karnataka and Tamil Nadu, he has to apply for separate GST registration in Karnataka and TN respectively.
A business with multiple business verticals in a state may obtain a separate registration for each business vertical.
Is amendment in GST Registration Certificate possible?
A taxable person can on his own, at the common portal, make amendments in some information without prior approval like e-mail IDs, mobile numbers etc. But in the case of following changes he will have to apply for amendment within 15 days:
Legal name of the business.
State of place of business or additional place of business.
What is Aggregate Turnover?
Aggregate Turnover is the total value of:
Taxable supplies including exports and inter-state supplies (excluding inward supplies on which tax is payable on reverse charge basis).
Who is Casual Taxable person?
A Casual taxable person is one who has a registered business in some State in India, but wants to effect supplies from some other State in which he is not having any fixed place of business. Such person needs to register in the State from where he seeks to supply as a Casual taxable person.
Who is Non-resident Taxable person?
A Non-Resident taxable person is one who is a foreigner and occasionally wants to effect taxable supplies from any State in India, and for that he needs GST registration.
What are the provision related to registration for Casual Taxable person and Non Resident Taxable person?
They have to apply for registration at least 5 days in advance before making any supply. The Registration Certificate issued is valid for a period of 90 days which can be extended. Further, they are granted registration or extension of period only after they deposit estimated tax liability.
What is Composition scheme and when should a business opt for it?
Small businesses having an annual turnover less than Rs. 1 crore* ( Rs. 75 Lakhs for NE States) can opt for Composition scheme.
*GST Council decided to increase the limit to Rs. 1.5 crores but notification is awaited.
Composition dealers will pay nominal tax rates based on the type of business:
- Composition dealers are required to file only one quarterly return (instead of three monthly returns filed by normal taxpayers).
- They cannot issue taxable invoices, i.e., collect tax from customers and are required to pay the tax out of their own pocket.
- Businesses that have opted for Composition Scheme cannot claim any input tax credit.
Composition scheme is not applicable to :
- Service providers
- Inter-state sellers
- E-commerce sellers
- Supplier of non-taxable goods
- Manufacturer of Notified Goods
Who can Register for Composition scheme under GST?
This scheme is a lucrative option for all SMEs who want lower compliance and lower rates of taxes under GST.
A GST taxpayer whose turnover is below Rs 1 crore* can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the present limit is Rs 75* lakh.
Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.
* Limit is raised to Rs. 1.5 crores after decision taken by the GST Council. However notification is awaited.
Learn the Rules about Composition scheme & Know the pros & cons of being a composition dealer.
Obtain GST registration and file CMP-02 to opt in for the scheme.
What are the benefits of registering under GST?
A. For normal registered businesses:
1. Take input tax credit
2. Make interstate sales without restrictions
B. For Composition dealers:
1. Limited compliance
2. Less tax liability
3. High working capital
C. For businesses that voluntarily opt-in for GST registration (Below Rs. 20 lakhs)
1. Take input tax credit
2. Make interstate sales without restrictions
3. Register on e-commerce websites
4. Have a competitive advantage compared to other businesses
Who is an ISD? Will ISD require a separate registration?
ISD means Input Service Distributor. It is like a head office that receives the tax invoices of input services and then further distributes the credit of tax paid by it to its units proportionately. The ISD registration is different from the normal registration for the taxpayer.
Is Cancellation of GST Registration Certificate possible?
Registration can be cancelled in 2 scenarios:
When the taxable person wishes to voluntarily cancel his GST registration.
When the proper officer, on default by the taxable person, moves to cancel the GST registration on his own motion. This may be when the person is not doing business from his declared registered place of business or if he issues tax invoice without making the supply of goods or services.
What is the procedure to seek cancellation of GST Registration Certificate?
The taxable person has to apply on the common portal within 30 days. He will declare in the application, the stock held on that date, amount of dues and credit reversal and particulars of payments made towards discharge of such liabilities. If satisfied, the proper officer will cancel the registration within 30 days.
What is the procedure for GST Registration for Foreigners?
Goods and Services Tax or GST has been actualized in India from first July, 2017 and non-inhabitant citizens are likewise required to get GST enlistment and document GST returns. As indicated by the GST Act, “non-inhabitant taxable individual” means any individual who every so often embraces exchanges including supply of goods or services or both, regardless of whether as central or operator or in some other limit, yet who has no settled place of business or living arrangement in India. All non-occupant taxable people are required to choose an approved individual in India to comply with GST controls.
Non-inhabitant citizens are required to get GST enlistment as a Non-Resident Foreign Taxpayer 5 days preceding the endeavor business in India. An application for GST enlistment for outside non-inhabitant taxable individual must be made through an approved specialist in India. Once, an application for GST enlistment is documented, an exchange number would be created. Utilizing the exchange number, GST store must be made by the citizen to acquire GST enlistment in India.
Penalty for not registering under GST
An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000.
The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes