GST REGISTRATION
Good and Service Tax Act enacted in 2017 is the recent development for the reformation of indirect taxes in the country. Previously the country levied two types of taxes on the public, Direct Tax, and Indirect Tax. GST is an indirect tax that has replaced other indirect taxes like VAT, Service Tax and Excise Tax.
Formulated with an aim to implement “one country one tax”, Goods and Service Tax has now become a single indirect tax law for the entire country. It has helped improve the competitiveness of products in the market by eliminating several taxes and leveeing just one tax, which is the GST.
Moreover, it has fastened the whole process of return filings, applications for refunds, etc. by accommodating an online portal to carry out the same. GST is an attempt by the government to increase the base of taxpayers and improvise the regulation of indirect taxation in the country.
What are the Components of GST?
Following are the taxes applicable under the Good and Service Tax:
1) CGST:- The tax collected by the Central Government on all transactions within the state.
2) SGST:- The tax collected by the State Government on all transactions within the state.
3) IGST:- The tax collected by the Central Government on all the transactions within two different states (E.g.- Transactions between the states of Maharashtra and Uttar Pradesh).
For all the transactions within the sale, the tax collected would be divided between the Central and State governments. For those inter-state transactions, the tax levied would be collected by the Central Government. The Central Government will then share the collected tax (IGST) with the state. In the matter of inter-state transactions, since more than one state is involved the Central Government shares the tax with the state that holds the destination of the goods.
Who needs to get a GST registration mandatorily?
Following are a few examples that mandatorily have to register for GST:
1) All businesses whose turnover exceeds 40 lakhs in a financial year. (Businesses related to the supply of Goods)
2) All businesses in the Special Category States (NE and Hill States) whose turnover exceeds 10 lakhs in a financial year. (Businesses related to the supply of Goods)
3) All businesses whose turnover exceeds 20 lakhs in a financial year. (Businesses related to the supply of Services)
4) All businesses transacting inter-state
5) Casual taxable person (one who supplies goods/ services in a state where GST is applicable but does not have a fixed place of business in that state)
6) Non-resident taxable person (one who supplies goods/services to the country in a state where GST is applicable but does not have a fixed place of business in the country)
7) Input Service Distributor (office of the supplier of goods/service, who receives tax invoices on input services and issues tax invoices for the distribution of credits on taxes paid on those said services)
8) E-Commerce aggregator ( E.g. Amazon, Flipkart)
9) A person who supplies via E-Commerce aggregators
GST Registration:
The process of registering one as a normal taxable person is called GST registration. It is mandatory for certain businesses whose turnover exceeds 40 lakhs in an annual financial year (10 lakhs for NE and Hill States). If such businesses carry out business without registering themselves under GST, it is an offense and heavy penalties are applied to such businesses.
