GST Registration
GST registration is essential for businesses in India. If your business revenue surpasses certain threshold levels or belongs to specific categories that require GST registration, it's imperative to register following the GST regulations
Overview of Online GST Registration
Since its introduction on 1 July 2017, the Goods & Services Tax (GST) has been mandatory for all service providers, traders, manufacturers, and even freelancers in India. The GST system was implemented to replace Central and state-level taxes such as Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, and VAT, making the tax process more streamlined.
For those taxpayers whose annual turnover is less than ?1.5 crore, the GST framework provides an option for a composition scheme. This scheme allows them to undergo simplified GST procedures and pay taxes at a predetermined rate according to their turnover.
The GST mechanism operates throughout various stages of the supply chain. This includes acquiring raw materials, production, wholesale, retail, and the eventual sale to the end consumer. Notably, GST is imposed at every one of these steps. For example, when a product is produced in West Bengal and then used in Uttar Pradesh, the GST revenue generated is allocated entirely to Uttar Pradesh, emphasizing the consumption-based nature of GST
Who is Required to Register for GST
Business Entities :Any enterprise with an aggregate annual turnover exceeding Rs. 40 lakhs. For special category states under GST, the threshold is Rs. 20 lakhs.
Exemptions : It's important to note that entities dealing exclusively in GST-exempted goods or services are not bound by these thresholds.
Previously Registered Entities :Entities that were registered under older tax frameworks (like Excise, VAT, Service Tax, etc.) need to migrate and register under the GST regime.
Service Providers :Those with an aggregate annual turnover surpassing Rs. 20 lakhs. For special category states, this limit is Rs. 10 lakhs.
Casual Taxable Entities :Those who undertake taxable supply occasionally.
Inter-State Suppliers :Any entity or individual involved in the supply of goods across state boundaries.
E-Commerce Platforms : Operators or aggregators of e-commerce platforms
Supplier's Agents :Representatives who supply on behalf of a principal supplier.
Online Service Providers :ntities delivering online information, database access, or retrieval services from outside India to an individual in India, excluding those already registered under GST.
Non-Resident Taxable Entities :Individuals or entities that are non-resident but engage in taxable supply within India.
Input Service Distributors & Agents :Distributors of input services, including their representatives.
GST Registration Turnover Limit
GST registration can be obtained voluntarily by any person or entity irrespective of turnover. GST registration becomes mandatory if a person or entity sells goods or services beyond a certain turnover.
Service Providers :Any person or entity who provides service of more than Rs.20 lakhs in aggregate turnover in a year is required to obtain GST registration. In special category states, the GST turnover limit for service providers has been fixed at Rs.10 lakhs.
Goods Suppliers:As per notification No.10/2019 any person who is engaged in the exclusive supply of goods whose aggregate turnover crosses Rs.40 lakhs in a year is required to obtain GST registration. To be eligible for the Rs.40 lakhs turnover limit, the supplier must satisfy the following conditions:
Should not be providing any services.
The supplier should not be engaged in making intra-state (supplying goods within the same state) supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripur and Uttarakhand.
Should not be involved in the supply of ice cream, pan masala or tobacco.
If the above conditions are not met, the supplier of goods would be required to obtain GST registration when the turnover crosses Rs.20 lakhs and Rs.10 lakhs in special category states.
Special Category States :Under GST, the following are listed as special category states - Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
Aggregate Turnover :Aggregate turnover = (Taxable supplies + Exempt Supplies + Exports + Inter-State Supplies) – (Taxes + Value of Inward Supplies + Value of Supplies Taxable under Reverse Charge + Value of Non-Taxable Supplies).
Aggregate turnover is calculated based on the PAN. Hence, even if one person has multiple places of business, it must be summed to arrive at the aggregate turnover.
GST Certificate
The GST Certificate stands as an authoritative document provided by the Indian government to entities that are registered under the Goods and Services Tax (GST) framework. This certificate confirms a business's legitimate Registration under GST and prominently displays key details such as the GST identification number, the business name, and official address.
Possessing an authentic GST Certificate is pivotal for enterprises because:
Tax Collection Authority : It empowers businesses to impose and gather GST from their clientele.
Tax Credit Claims :With this certificate, businesses can rightfully claim credits on the GST they've disbursed on their procurements and operational costs.
Loan Applications :When seeking financial aid or loans, businesses might be asked to present their GST certificates to validate their authenticity.
Government Tenders :o be eligible and participate in official government tenders, the GST Certificate must often be produced as evidence of tax compliance.
Market Reputation : The certificate enhances a business's stature in the market, reflecting its commitment to national tax regulations.