GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017. Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.
In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services. This law has replaced many indirect tax laws that previously existed in India.
GST is one indirect tax for the entire country. GST registration is mandatory for every taxpayer who falls under GST criteria.
Here in this article, let us understand what is GST registration in detail.
What is GST registration?
In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.
For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.
Any supplier who carries on any business at any place in India & whose aggregate turnover exceeds Rs.20 lakhs in a financial year is liable to get himself registered and obtain GSTIN. However, the said limit is reduced to Rs 10 lakhs to the states specified in Article 279A (4)(g) of the constitution viz. Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
It is mandatory to obtain GSTIN in case of certain category of persons. The major categories are given below:
- Persons making any Inter-State taxable supply of Goods / Services
- Persons who are required to pay tax under Reverse Charge Mechanism (RCM) or Persons who are required to deduct tax under GST (TDS)
- Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise
- Input service distributor
- Casual taxable persons or Non-resident taxable persons
Registration under Goods and Service Tax (GST) regime will confer advantages to the business:
- Legally recognized 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 supply of goods or services or both by the business.
- Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.
Here in this article, we have understood what is GST registration, it will surely be useful for you to grow your business. The next important step in managing your business is to open current account online. Once this is done you are all set to manage and maintain your business smoothly and successfully.
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