Written by : Rajiv Singh
A Chartered Accountant in UK with 15+ years of experience in FinTech Consulting, Accounting & International Taxation. I enjoy being a Social, Foodie and Father of two young children, reachable at linktr.ee/RajivSingh.
Do you run a small business in India? Are you wondering if GST applies to your business or not? We are here to solve your queries and apprehensions. GST or Goods and Service Tax is a comprehensive indirect tax system that the central and state governments levy in India according to the GST Act, 2017. As per the estimations for 2020, more than 1.2 crore entities have a GST registration under the Act.
You must have seen that the businesses which register themselves for GST get a unique identification number known as the Goods and Service Tax Identification Number (GSTIN). This ID helps the government keep a record of all the GST payments and returns submitted on behalf of a given business. GST has simplified the tax return payment process to a great extent. A business entity that is liable for registering under GST guidelines must obtain the same. However, there are GST exemptions for small businesses in India.
The business entities that fall under the following turnover criteria have to get a GST registration.
If your company falls under any of these categories, you must get yourself registered under GST Act, 2017. Apart from the above-stated three prerequisites, there are also other conditions that one must consider for determining if they need to get a GST registration or not.
Even if your business does not attract any of the above regulatory conditions, you can obtain a voluntary GST registration for your business. An entity obtains a GST registration under the regular scheme or makes use of the Composition Scheme if it is eligible for the same. There are specific turnover limits for business enterprises that want to get GST registration under the Composition Scheme. Presently, for businesses located in states other than special category states, the turnover limit is Rs. 1.5 Crores.
Earlier, to register a business, a VAT or CST registration was essential. The VAT laws would vary for each of the different states in India. Thus for the business enterprises with inter-state dealings, it was difficult for them to register and carry out the general tax payments. However, post the implementation of the GST Act in 2017, the registration and tax return filing procedure has become centralized and standardized. It has led to an increase in inter-state business and easier tax return payment.
Previously, the centre and the state governments would impose various taxes differently for different businesses. However, after GST, many taxes have been subsumed under one tax, that is the GST.
The VAT registration for different states was different depending upon the turnover of the business; in some states, it was applicable from Rs. 5 lakhs, while in some, it was from Rs. 10 lakhs. This created lots of complexities and confusion for all the businesses. With GST, the companies with annual turnover below 20 lakhs need not register themselves under GST. They are exempted from paying the GST. Small businesses are at an advantage with this law.
GST provides transparency, ensuring that the taxpayers do not indulge in malpractices such as corruption, tax avoidance, frauds, and pestering of taxpayers by the authorities. GST has replaced a complex indirect tax system into a simple yet effective techno- driven way of taxes. This has led to simplicity of payment for the taxpayers and abundant revenue generation for the government.
The tax payable as the GST Act uses the "Ad Valorem" basis for taxing business entities. Thus, all the intermediaries involved can use credit for the portion of the tax, which is already paid only to pay the net liability between the seller and final consumer. Thus, there is no cascading tax levy.
One can obtain a GST registration by making an online application on the GST portal. However, if you are confused about the process for registration, you can find some assistance. Hiring professionals such as a CA or CS for registering your venture under the GST is a good choice. You can search for online help for your GST registration needs from the comforts of your home. Gotaxfile can offer you robust assistance at an economical price to sort out your registration process.
Depending on the type of business entity, one must submit copies of certain documents with the relevant GST authorities. PAN, Aadhar Card, bank statements, photos of proprietor/partners/directors, proof of address for the given business premise are among the records commonly needed for the registration process.
Gotaxfile is one of the emerging tax and accounting firms that is all set to ease legal compliance, such as GST for businesses across India. We have a lucid and highly interactive portal for entities to enable to derive required assistance for their tax, accounting, or secretarial demands. We have the technological proficiency and technical knowledge to help you in complex domains such as the GST. From registration to return filing under GST Act, 2017, Gotaxfile can seamlessly carry out these compliances in a very cost-efficient manner. Take your small business venture towards a larger scale. Accelerate with the Gotaxfile team! Contact now!
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