GST Registration

GST (Goods Service Tax) Registration

GST is a bill that was made to simplify the taxation on products and services. It endeavors to make one nation, one tax dream into a reality. Under GST, the complex Indian taxation policy is simplified.

Before GST taxes such as service taxes, state vats, entry taxes, luxury taxes were applied on goods. These taxes have been absorbed under GST, now there is only single tax that is GST.

Launched on July 1 2017, the Goods & Services Tax (GST) applies to all Indian service providers (including freelancers), traders and manufacturers. A variety of Central taxes like Service Tax, Excise Duty, CST and state taxes like Entertainment Tax, Luxury Tax, Octroi, VAT are absorbed in one tax – GST, implemented on 01.07.2017. GST is to be charged at every step of the supply chain, with full set-off benefits available. The procedure for GST is entirely online and requires no manual intervention.

Every product goes through multiple stages along the supply chain, which includes the purchasing of raw materials, manufacturing, sale to the wholesaler, selling to the retailer and then the final sale to the consumer. Interestingly, GST will be levied on all of these 3 stages. Let’s say if a product is produced in West Bengal but is being consumed in Uttar Pradesh, the entire revenue will go to Uttar Pradesh.

Also, taxpayers with a turnover of less than Rs.1.5 crore can choose composition scheme to get rid of tedious GST formalities and pay GST at a fixed rate of turnover.

What are the components of GST?

GST will have 3 tax components, which includes a central component (Central Goods and Services Tax or CGST) and a state component (State Goods and Services Tax or SGST) where centre and state will levy GST on all entities, i.e. when a transaction happens within a state. Inter-state transactions will attract the Integrated Goods and Services Tax (IGST), to be levied by the centre, i.e. when a transaction happens one state to another.

As India is a United country, so the central and state government with apply the tax different.

1. CGST (Central goods service tax): It is the tax applied by the central government.
2. SGST (State goods service tax): It is the tax applied by the state government.
3. IGST (Inter-state goods service tax): It is charged when movement of goods and services from one state to another. The applicable GST rate will be 6% SGST received by state and 6% CGST received by the Central Government.

Advantages of GST:

• Many taxes are applied on the same product that increased the price of the product, due to GST these taxes with be eliminated
• GST mainly introduced to remove the tax on tax or the cascading effect on goods and services.
• All the registrations, return filings and application for refund needs to be done online on the GST portal making these process faster.
• Introduction of GST has made the Indian products competitive in domestic and international markets.
• Previously classification of products into different categories caused confusion and was a big issue. GST us issue’s solved this problem by using eight-digit code to identify products according to the international standards.

Applicability and Eligibility of GST:

Under GST bill tax is payable by a person of e on the supply of goods and services. Responsibility to pay these taxes comes up when a taxable person crosses the threshold of exemptions of GST i.e., 10Lakhs.The CGST and SGST need to paid by the person on all the supply of goods and services within the state, IGST is payable on all the interstate transactions.

Individuals who are registered under the pre GST (VAT, service tax and excise are eligible for GST). The agents of the suppliers of goods and input distributors can register for GST.People supply goods online, Services taking part in E-commerce should get register in GST.

LIST of business for which GST is mandatory.

• Casual taxable person / Input Service Distributor (ISD)
• Non-resident taxable person
• Inter-state supplier of goods and services
• Any service provider
• Liable to pay tax under the reverse charge mechanism
• TDS/TCS deductor
• Online data access or retrieval service provider

Documents required for the GST Registration:

• Permanent Account Number (PAN) of the applicant
• Copy of the Aadhaar card
• Proof of business registration or incorporation certificate
• Identity and address proof of promoters/directors with a photograph
• Bank account statement/cancelled cheque
• Authorization letter/board resolution for authorized signatory
• Digital signature

Process for the GST registration:

• Step:1 Visit the GST portal (www.gst.gov.in).
• Step:2 A 15-digit GST identification number will be issued based on your state code and PAN number.
• Step:3 Upload invoices on the GST portal or the software. An invoice reference number will be issued against each invoice.
• Step:4 After uploading invoices, outward return, inward return, and cumulative monthly return have to be filed online. If there are any errors, you have the option to correct it and refile the returns.
• Step:5 File the outward supply returns in GSTR-1 form through the information section at the GST Common Portal (GSTN) on or before 10th of the following month.
• Step:6 Details of outward supplies furnished by the supplier will be made available in GSTR-2A to the recipient.
• Step:7 Recipient has to verify, validate, and modify the details of outward supplies, and also file details of credit or debit notes.
• Step:8 Recipient has to furnish the details of inward supplies of taxable goods and services in GSTR-2 form.
• Step:9 The supplier can either accept or reject the modifications of the details of inward supplies made available by the recipient in GSTR-1A.

What is the input tax credit?

• Input tax credit lets you reduce your tax you have already paid on inputs and pay the remaining amount at the time of paying tax.
• You pay taxes on the purchase when a product is purchased from a registered seller, and when you sell the product, you too collect the tax. With input credit, you can adjust the taxes paid at the time of purchase with the amount of tax on sales (output tax) and pay the balance liability of tax, i.e. tax on sale minus tax on the purchase.

Who needs a GST Registration?

• Every business or corporation that are involved in the buying and selling and good of services have to register for GST. It is mandatory for companies whose turnover is more than Rs.20 lakhs (for supply of services) and Rs. 40 lakhs ( for supply of goods) yearly to register for a GST.
• All businesses making interstate outward supplies of goods have to register for a GST too. The same applies to businesses making taxable supplies on behalf of other taxable persons, example Agents and Brokers.
• Also, as per the recent notification, e-commerce sellers/aggregators need not register if total sales are less than Rs.20 lakhs.

What are the GST tax rates?

• Items that are considered basic necessities come under exempt list i.e. they are not taxed.
• Household necessities and life-saving drugs etc. are taxed at 5%.
• Products like computers and processed food are taxed at 12%.
• Hair oil, toothpaste and soaps, capital goods, industrial intermediaries and services are taxed at 18%.
• Luxury items are taxed at 28%.

You can see the tax rates for all the products here: https://cbec-gst.gov.in/gst-goods-services-rates.html

What is a GST Return?

A GST Returns is a document containing details of income that is required to be filed as per the law with the tax authorities. Under the GST law, a taxpayer has to submit two returns on a monthly basis and one such return annually. All returns have to be filed online. Please note that there is no provision for revising the returns. All invoices for the previous tax period that went unreported must be included in the current month.

Under GST, a registered dealer has to file GST Return that include: Purchases, Sales, Output, GST (On sales) and Input tax credit (GST paid on purchases).

What is GSTIN?

GSTIN is a unique identification number given to each GST taxpayer. To verify a GSTNnumber a person who has a GST number can log onto the GST portal.

What is the GSTN (Goods and Service Tax Network)?

The Goods and Service Tax Network (or GSTN) is section 8 (non-profit), non-government, private limited company. GSTN is a one-stop solution for all your indirect tax requirements. GSTN is responsible for maintaining Indirect Taxation platform for GST to help you prepare, file, rectify returns and make payments of your indirect tax liabilities.

 

TYPES OF GST AND ELIGIBILITY

Form Type	Who should file?
GSTR-1	Every registered Individual or entity
GSTR-2A	View-only Autofill form
GSTR 2B	View-only
GSTR 3B	Regular taxpayer
GSTR- 4	Composition dealer who has opted composition scheme
GSTR-5	Non-resident foreigners who have businesses in India
GSTR-5A	Non-resident OIDAR service providers
GSTR-6	Input Service Distributor (ISD)
GSTR-7	Individuals who need to deduct TDS under GST
GSTR-8	E-commerce operators
GSTR-9	Every registered taxpayer
GSTR 9C	Every registered taxpayer
GSTR-10	People whose registration has been cancelled or surrendered
GSTR-11	By foreign diplomatic missions and embassies for refund claim