GST

GST is a huge reform for indirect taxation in India, the likes of which the country has not seen post Independence. GST will simplify indirect taxation, reduce complexities, and remove the cascading effect. Experts believe that it will have a huge impact on businesses both big and small, and change the way the economy functions.

 

India has a Dual GST Model. Under this tax may be levied simultaneously by both Central and State governments on certain taxable supplies.

​

Comprehensive:
GST will subsume all of the current indirect taxes. Plus, by bringing in a unified taxation system, across the country, it will ensure that there is no more arbitrariness in tax rates.

 

Multi-stage:
GST is levied each stage in the supply chain, where a transaction takes place.

 

Value-addition:
This is the process of addition to the value of a product/ service at each stage of its production, exclusive of initial costs. Under GST, the tax is levied only on the value added.

 

Destination-based consumption:
Unlike the current indirect taxes, GST will be collected at the point of consumption. The taxing authority with appropriate jurisdiction in the place where the goods/ services are finally consumed will collect the tax.

​

​

Who Must Get GST Registration

All businesses involved in buying or selling goods or providing services, or both, should register for GST. But for below-listed persons, GST Registration is compulsory.

 

Previous Law Converted Taxpayer – All individuals or companies registered under the Pre-GST tax laws like Service Tax or Excise or VAT, etc.

 

Turnover for Goods Provider – If your sales or turnover of goods is crossing Rs. 40 lakh in a year then GST Registration is mandatory. For the Special Category Status, the limit is Rs. 20 lakh in a year.

 

Turnover for Service Provider – If you are a service provider & sales or turnover is crossing Rs. 20 lakh in a year then GST Registration is mandatory. For the Special Category Status, the limit is Rs. 10 lakh in a year

 

Casual Taxpayer – If you supply goods or services, in events/exhibitions, and not have a permanent place of doing business. In such cases, GST is charged based on an estimated turnover of 90 days. The validity of the Registration is also 90 days.

 

Agents of Suppliers or Input Service Distributor (ISD) – All supplier agents and ISD, to earn benefits of Input Tax Credit, need GST Registration.

 

NRI Taxable Person – If you are an NRI or handling the business of NRI in India.

 

Reverse Charge Mechanism (RCM) – Businesses who need to pay taxes under the RCM also need to be GST registered.

 

E-Commerce Portals & Sellers – Every e-commerce portal (such as Amazon or Flipkart) under which multiple vendors are selling their products. Or for all vendors. You need a GST Registration.

 

Outside India Online Portal – For suppliers of online information and database access or retrieval services from a place outside India to Indian Residents.

 

Transferee – When the business has been transferred.

 

Inter-State Operations – Persons making an inter-state supply. Whatever the turnover.

 

Brands – Aggregator who supplies service under his Brand or Trade Name.

 

Other Taxation – Persons who are required to deduct tax u/s 37 (TDS) of the Income Tax Act.

 

Voluntary GST Registration – Any entity can obtain GST registration at any-time. Even when the above mandatory conditions don’t apply to them.

 

Inter-State Registration – If you are a supplier in more than one state you need GST Registration in all the states that you supply goods or services to.

 

Branches – If your business has multiple branches in multiple states, register one particular branch as the main office or head office and the remaining branches as additional. (Not applicable if the business has separate verticals as listed in Section 2 (18) of the CGST Act, 2017.)

The Special Category States under GST Act are:

(a) Arunachal Pradesh, (b) Assam, (c) Sikkim, (d) Meghalaya, (e) Tripura, (f) Mizoram, (g) Manipur, (h) Nagaland, and (i) Himachal Pradesh.