Overview
- GST stands for Goods and Service Tax.
- GST has replaced many Indirect Taxes in India. The prime taxes merged in GST are VAT, Service Tax and Excise Duty.
- Necessary laws for GST i.e. IGST, CGST, SGST have been passed by Parliament and State Assemblies.
- The Acts have come into effect on 1st July 2017.
- GST is quoted as one nation one tax.
Basic Law
- India has adopted a dual GST model, i.e., both the Centre and the States will levy tax on supplies of goods and/or services.
- CGST and SGST are levies on Intra-state supply of goods and/or services.
- IGST is levied on Inter-State supply of goods and/or services.
- The tax has been designed as a ‘destination based consumption tax’, i.e. tax would be leviable on the goods and/or services, in the State where they have been consumed.
- GST Council (consisting of all state members) headed by Finance Minister of India is the controlling authority to make laws in relation to GST.
- GST covers all goods and services, except Alcoholic beverages and Petroleum products.
GST Registration
GST Registration is a registration with the GST authorities. Via GST Registration, a unique 15-digit Goods and Service Tax Identification Number (GSTIN) is allotted by the GST authorities. In any tax system, this is the most fundamental requirement for identification of the business for tax purposes or for having any compliance verification program. Registration under Goods and Services Tax (GST) regime will confer the following advantages to business:
- Legally recognized as supplier of goods or services.
- Removal of cascading tax effects, composition Scheme for small business & online simpler procedure.
- Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods and/or services by the business. Pass on the credit of the taxes paid on the goods and/or services supplied to purchasers or recipients.
Registration under the GST Act is mandatory if your aggregate annual PAN-based turnover exceeds INR 20,00,000 (Rupees Twenty Lakhs) however the threshold for registration is INR 10,00,000 (Rupees Ten Lakhs) if you have a place of business in Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, or Uttarakhand.
Further, Irrespective of the Turnover, registration is mandatory for following:
Inter-State Supplies, Agent for Registered Principal, Liable to Pay Reverse Charge, Non-resident Taxable Person, Casual Taxable Person, Input Service Distributor, TDS/TCS Deductor, E-commerce Operator & An online data access and retrieval service provider.