One of the major change in taxation policy of our country is now going to take place in just a few hours. Since independence, this is the biggest reform in the tax. GST [ Goods and Services Tax ] was rolled out at midnight and make India a simple market for the seamless exchange of goods and services. So, from today is mandatory to register for GST. To go smoothly with GST, you must know about it.
What is GST (Goods and Services Tax)?
Goods & Services Tax is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition.
In other words, Goods and Services Tax will be levied on all transactions happening during the entire manufacturing chain. GST carries a whole different taxation system than earlier. Earlier central govt. Imposes Excise duty on the manufacturing of goods and then VAT is added to every next stage of the sale. But in GST only a single Tax is added to every manufacturing process or point of sale of goods and services.
France was the world’s first country to implement GST Law in the year 1954. Since then, 159 other countries have adopted the GST Law in some form or other. In many countries, VAT is the substitute for GST, but unlike the Indian VAT system, these countries have a single VAT tax which fulfills the same purpose as GST.
In India, the discussion on GST Law was flagged off in the year 2000, when the then Prime Minister Atal Bihari Vajpayee brought the issue to the table.
Goods & Service Tax or GST will be levied on goods and services. It will replace all the various taxes and bring them under one umbrella to make compliance easier.
It will replace the following taxes:
- Taxes currently levied and collected by the State:
- State VAT
- Central Sales Tax
- Entertainment and Amusement Tax (except when levied by the local bodies)
- Taxes on lotteries, betting, and gambling
- Taxes currently levied and collected by the Centre:
- Central Excise duty
- Additional Duties of Customs (commonly known as CVD)
- Special Additional Duty of Customs (SAD)
- Service Tax
Registration Process for GST Application
Every business carrying out a taxable supply of goods or services under GST regime and whose turnover exceeds the limit of Rs. 20 lakh/10 Lakh as applicable will be required to register as a normal taxable person. This process of registration is referred as GST registration.
Although businesses with a turnover of up to Rs 20 lakh are exempt from GST, so registration is not mandatory for them.
Type of GST registration
- Casual Registration: A person who supplies goods and services occasionally within the territory of a nation, but doesn’t have fixed place of operating Business. Such a person will be treated as a casual taxable person as per GST.
- Composition Dealer
An option available for small-scale business which has a turnover less than Rs. 75 lakh. Composition scheme where they will tax at a nominal rate of 1% or 2.50% (for manufacturers) CGST and SGST each (rates will be notified later). They will need to maintain a less detailed record and file their return quarterly instead of monthly, they cannot issue taxable invoices but need to pay tax from, their own pockets. They cannot collect Tax with customers.Composition levy is available to only small businesses. It is not available to interstate sellers, e-commerce traders, and operators.
- Migration to GST or Whether all assesses / dealers who are already registered under existing central excise/service tax/ vat laws will have to obtain fresh registration?
Assesses / dealers who are already registered under existing central excise/service tax/ vat laws will be migrated to GST. to migrate to GST; dealers would give a Provisional ID and Password by CBEC/State Commercial Tax Departments.
For converting the provisional registration to final, registration, the registrant’s need to visit GST Common Portal (https://www.gst.gov.in ) and will be asked to submit all, supporting documents and information required for registration [ fill Form 20 ]. If Failed to do so, will result in cancellation of the provisional GSTIN number.
What is GSTIN (Goods & Services Tax Identification Number)?
GSTIN- Goods & Services Tax Identification Number is a 15 digit state wise PAN based number allotted by the government. It is expected that 8 million taxpayers will be migrated from various platforms into GST.
There are two methods for applying registration of GST Identification Number —
- visit GST common portal directly
- or Visit GST Common Portal through the Facilitation Center (FC).
Once you got registered for GST, you will receive a professional GSTIN. After that in the second stage, you have to log into the GSTIN portal and fills up all the demanded details of business like the main place of business, additional place, directors and bank account details, etc.
You will just need to save this documentation into GSTN portal and a confirmation email saying all their details are saved, and the process of registration is complete, will be sent to email id of the business.
Documents required for GSTIN registration
- PAN CARD of the company
- Proof of incorporation of the firm, as proof MOA [ Memorandum of Association], Partnership Deed, Certificate of incorporation.
- Details and proof of place of business like rent agreement or electricity bill etc.
- A cheque of your bank account showing the name of account holder, MICR code, IFSC code and bank branch details.
- Authorized Signatory and list of partners/director and their address in case of company or partnership firm.
That’s all proofs and documents you need while registration of GST.
After registration you can download registration certificate can be downloaded from GST common portal.
What are the Facility provided for Digital signature in GST
yes, facilities are provided to taxpayers for submitting signature electronically. There are two options for signing applications electronically
- BY signing through Aadhar Number
- BY DSC i.e. by registering the tax payer’s digital, signature certificate with GST portal.
It’s mandatory for Companies to sign through DSC only. Only level 2 and level 3 DSC certificates will be acceptable for the signature purpose.
Benefits of Registering Business under GST
- Legally authorized as a supplier of goods or services.
- Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on the supply of goods or services or both by the business.
- Legally authorized to collect tax from his customers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients
A person without GST registration can neither collect GST from his customers nor claim any input tax credit of GST paid by him.
Beware of Frauds…
GO FOR GST AND EARN WITH HONESTY AND CLARITY OF TRANSACTIONS.