You have heard of the Goods and Services Tax. You may have heard it even if you are a small businessman, a service provider, or a customer (GST). On July 1, 2017, the GST became active in India. It completely overhauled the country’s tax system.
A GST tax is a single tax levied on the surplus value an organization creates in the marketplace. The government of India taxes businesses on their specific product or service. They tax businesses at each step of the production and distribution process. And, the cost falls on the end user.
When it’s time to pay your GST, the first step is to register your business under GST. Suppose you’re the founder of a new business. In that case, you could feel completely overwhelmed by it all. Here’s all you need to know about GST registration
Who Should Register for GST?
Any business with more than Rs. 40 lakh annual revenue must register as a regular taxable person. But, a firm in Jammu and Kashmir, Himachal Pradesh, or Uttarakhand must meet a lower barrier of Rs. 10 lakh. For service providers, the annual revenue must be Rs. 20 lakh. But, in special category states, it is Rs.10 lakh.
Here is a list of businesses that must register for GST regardless of their annual revenue:
- Casual taxable person / Input Service Distributor (ISD)
- Non-resident taxable person
- Inter-state supplier of goods and services
- Supplier of goods through an e-commerce portal
- Any service provider
- Liable to pay tax under the reverse charge mechanism
- TDS/TCS deductor
- Online data access or retrieval service provider
What Documents Do You Need for GST Registration?
To register your business for GST, you will need the following items.
- PAN Card
- Aadhar Card
- Business registration documents
- ID proof and address proof
- Cancelled cheque or bank statement
- Proof of authority
- Digital signature
Types of GST Registration in India
Listed below are the various GST registrations available in India:
A normal taxpayer is anyone with a yearly revenue of over Rs. 40 lakhs. But, his annual revenue must be less than Rs. 75 lakhs. GST registration is optional for the service and manufacturing sectors.
To qualify for GST registration under this plan, a taxpayer’s yearly revenue must be less than Rs. 1.5 crores. Small taxpayers can use this arrangement to pay a flat tax rate. And, to also avoid the hassle of GST paperwork.
Casual taxable person
Consider a person who does not have a permanent place of business. But, he makes supplies in a region where GST is payable. In that case, he is a casual taxable person under GST.
Non-resident taxable person
These people are those who are present outside India. But, they supply products or services to whom GST applies.
Non-resident online service distributor
Suppose you’re an individual providing services internationally. And, you haven’t already registered for GST. In that case, you’ll need to do so.
UN Body/Embassy/other notified individuals
The UN agencies and embassies each have a unique identification number. The Ministry of Foreign Affairs provided this number. This number helps them accept deliveries from registered individuals. Such groups may access GST’s online application system.
Special Economic Zone unit or developer
Submit the required certificate and documentation. And, SEZ developers and units can begin the GST registration process.
Candidates who deduct tax on supplier payments totalling more than Rs. 2.5 lakhs per year are required to register for GST. People can bypass the intermediary and submit their registration forms online.
How Much Does GST Registration Cost?
Note that there is no cost to register for GST for taxpayers. As a result, there is no charge associated with GST registration.
But, the government will impose a GST penalty for late or insufficient tax payments. Unless the total amount is more than Rs. 10,000, the penalty imposed by GST is 10% of the tax amount. If you avoid taxes on purpose, the government will hit the offender with a fine equal to the amount owed.
What Are the Benefits of GST Registration?
Listed below are some of the many benefits of registering for GST:
Simplifies Taxation Services: GST in India is a comprehensive tax. It has helped to unify the country’s economic system.
Reduction In Costs Of Products & Services: The implementation of GST has reduced prices for consumers. It has done so by eliminating the domino effect of many taxes.
Helps In Avoiding Lengthy Taxation Services: GST registration has eliminated the lengthy tax processes. Also, these don’t have to pay taxes:
- Service providers with annual revenue less than 20 lakhs
- Product providers with annual revenue less than 40 lakhs
Aimed At Reducing Corruption And Sales Without Receipts: GST focuses on ending shady dealings and cash transactions. Indirect tax compliance is simplified, which is especially helpful for smaller businesses.
Uniformity In Taxation Process: GST registration ensures a standardized and centrally registered tax system. Because of this, you can now file quarterly tax returns digitally.
Minimizing Tax Evasion: With GST in place, tax avoidance is significantly reduced.
Higher Threshold For Registration: Before GST, companies with more than Rs 5 lakh in revenue had to pay taxes. The tax was also waived for businesses with annual revenue of less than Rs 10 lakh. But, this ceiling has been raised to Rs 20 lakh under GST. This regime allows many small businesses to avoid paying the tax.
Composition Scheme For Small Businesses: The composition scheme is a great benefit. It helps small businesses make between Rs 20 and Rs 75 lakh annually. It helps them take advantage of GST’s tax savings. For many small enterprises, this change has reduced taxes and costs.
Simple And Easy Online Procedure: The GST system is completely digital. Hence, this feature makes every step of the procedure quick and easy. Particularly new businesses have benefited from this. That’s because they no longer need to register their business painfully. Earlier, they did so by running from agency to agency.
GST registration has several benefits. And, if you meet the requirements, you should register for GST immediately. You must have your firm registered and should avail the many benefits of GST. That’s because, with GST, several businesses have grown.
This was a complete guide on things to know about GST registration in India. We hope you found this article useful. Need instant funds? Apply for a quick personal loan with Piramal Finance now!