Goods and Services Tax ("GST") is the indirect tax levied in India and subsumes different taxes such as service tax, excise duty, VAT, entry tax and customs duty, into a single tax system. GST was introduced to reduce complexities and compliances of doing business for millions of small businesses in India.
Registration of any business entity under the GST Law implies obtaining a unique number from the concerned tax authorities for the purpose of collecting tax on behalf of the government and to avail Input Tax Credit for the taxes on his inward supplies.
• First two digits of GSTIN will represent the state code
• Next ten digits of GSTIN will belong the PAN number registered person.
• Next two digits will be assigned based on the number of registration within a state.
• Last digit will be for check code
1. GST Registration Benefit for Citizens:
• Simpler tax system.
• Uniform prices throughout the country.
• Transparency in taxation system.
• Increase in employment opportunities.
• Easy of doing Business.
• Easy to manage & operate or comply.
• Take input tax credit.
• Lower Transaction cost.
• Self-regulating tax system.
• Controls “black” Transactions.
Step 3: 2. GST Registration Benefit for Trade/Industry:
• Legal identity as supplier of goods or services.
• Reduction in multiplicity of taxes.
• Mitigation of double taxation.
• Make interstate sales without restrictions.
• Input tax credit can be utilized for payment of GST on supply of goods and services.
• Development of common national market.
• Simpler tax regime-fewer rates and exemptions.
• More efficient neutralization of taxes especially for exports.
• Non-intrusive electronic tax system.
• Reduction in prices of goods and services due to elimination of cascading.
• One stop solution for all tax compliance.
• Less tax liability.
• Limited compliance.
3. GST Registration Benefit for Central and State Governments:
• A unified common national market to boost Foreign Investment and “Make in India” campaign.
• Boost to export/manufacturing activity, generation of more employment, leading to reduced poverty and increased GDP growth.
• Improving the overall investment climate in the country which will benefit the development of states.
• Uniform SGST and IGST rates to reduce the incentive for tax evasion.
• Reduction in compliance costs as no requirement of multiple records keeping.
• Good balance between centre and states.
• Efficient use of resources.
For whom is GST registration mandatory?
GST Registration Threshold Limits Increased - Overview of earlier limits, new limits and the date of applicability -
|Aggregate Turnover||Registration Required||Applicability|
|Earlier Limits – For the sale of Goods/Providing Services|
|Exceeds Rs.20 lakh||Yes – For Normal Category States||Up to 31st March 2019|
|Exceeds Rs.10 lakh||Yes – For Special Category States||Up to 31st March 2019|
|New Limits – For Sale of Goods|
|Exceeds Rs.40 lakh||Yes – For Normal Category States||From 1st April 2019|
|Exceeds Rs.20 lakh||Yes – For Special Category States||From 1st April 2019|
|New Limits – For Providing Services|
|There has been no change in Threshold limits for Service Providers|
Good & Services Tax (GST) Registration Slab
|5%||Household necessities such as edible oil, sugar, spices, tea, and coffee (except instant) are included. Coal , Mishti/Mithai (Indian Sweets) and Life-saving drugs are also covered under this GST slab|
|12%||This includes computers and processed food|
|18%||Hair oil, toothpaste and soaps, capital goods and industrial intermediaries are covered in this slab|
|28%||Luxury items such as small cars, consumer durables like AC and Refrigerators, premium cars, cigarettes and aerated drinks , High-end motorcycles are included here.|
What is the penalty for not registering under GST?
• An offender who is not paying tax or fails to make full payment (genuine errors) will be penalized 10% of the tax amount due. The minimum penalty will be Rs. 10,000 if the 10% amounts to a lesser figure. In case the offender has intentionally evaded payment of taxes, the penalty levied will be 100% of the tax amount due.