With a view to abolish several other indirect taxes and to create a single taxation system, GST was introduced in India. Also, GST helps in the ease of collection and to enhance the efficiency of the process.
GST Registration is required for the businesses whose turnover gets over Rs. 40 lakhs* for sale of goods (Rs 20 lakhs for North Eastern – All hilly states for sale of goods). There has been no change in the threshold limits for service providers. Persons providing services need to register if their aggregate turnover exceeds Rs.20 lakh (for normal category states) and Rs.10 lakh (for special category states).
The advantages of GST Registration are given bellow:-
GST has combined a number of indirect taxes under one umbrella and integrated the Indian market.
With the introduction of GST, the cascading effect of a series of VATs and taxes has been erased which has resulted in the reduction of cost of goods and services.
GST Registration helps the small businesses in avoiding the lengthy taxation services. As the service providers with a turnover of less than 20 lakhs and goods provider with a turnover of less than 40 lakhs are exempt from paying the GST.
GST was introduced with an aim of reducing corruption and sales without receipts. Also, it helps in reducing the need for small companies to comply with various indirect taxes.
GST Registration brings uniformity in the taxation procedure and allows centralized registration. This helps the businesses to file the tax returns every quarter through an online process.
With the introduction of GST, tax evasion is minimized to a great extent.
Earlier, in the VAT system, any business with a turnover of more than Rs 5 lakh was liable to pay VAT in India. In addition, service tax was exempted for service providers with a turnover of less than Rs 10 lakh. Under GST regime, on the other hand, this threshold has been increased to Rs 20 lakh, which exempts lot of small traders and service providers.
Under GST, small business under turnover of Rs 20 to 75 lakh can benefit as it gives an option to lower taxes by using the Composition scheme. This move has brought down the tax and compliance burden on many small businesses.
The complete process of GST (from registration to filing returns) is done online, and it is super simple. This has been advantageous for start-ups mainly, as they do not have to run from pillar to pillars to get diverse registrations such as VAT, excise, & service tax.
Previously, there was VAT & service tax, each of which had its own returns & compliances. Under GST, on the other hand, there is just one, unified return to be filed.
In the pre-GST era, it was often observed that certain industries in India like building construction and textile were largely unorganized and unregulated. Under GST, however, there are provisions for online compliances and payments, and for availing of input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to these industries.
The below mention person/entities are required to get registered under GST:-
For GST administration, a model was designed where the government (Central and State) have powers to impose and collect taxes through their respective legislations. The Modes of GST are given bellow:-
CGST is the tax imposed on the Intra State supplies of goods and services by the Central Government. When the place of the seller and the buyer is in the same state it is termed as an Intra-state supply of goods or services. Here, a seller has to collect both CGST and SGST in which CGST remains with the Central government while the SGST is collected by the State government.
SGST is the tax levied on the Intra State supplies of goods and services by the State Government.
Integrated GST is governed by the IGST Act, where the seller has to collect IGST from the buyer, and the tax collected will be divided between the Central and State Governments.
Union Territory GST is applicable when any goods and services are used in the Union territories (UTs) of India and the revenue is collected by the government of union territory.
GST regimes were made by considering all the layman and inflation rates in mind. To make it simpler and easier, the GST was structured following the four tiers structure. These four zones are given below, which are as follows:-
The documents required for the Online GST Registration varies with the type of business. The lists of documents required for GST Registration (based on the type of business) are listed below:-