Goods and Services Tax (GST) has swapped the features of taxation system in India with the idea to make tax regime more convenient for business entities. The GST registration is a significant procedure for all the companies transacting in India because it allows those businesses to collect the taxes on behalf of the government and in the meantime get the input tax credit. Before you apply for GST registration here are key factors you should know as an entrepreneur and a business person. This blog will discuss about the conditions for GST registration, advantages of GST registration and about the steps that one has to undergo for registration.
What is GST?
GST is the comprehensive tax replacing multitudinous other indirect taxes including Value Added Tax, Service Tax as well as Excise Tax. It is assessed on the sales of goods and services. With the aim of replacing paying tax at every point of the supply chain. A few businesses need to register for GST while some others can choose to register for GST.
Eligibility criteria for GST registration?
1. Aggregate Turnover Threshold
The turnover of a business is one of the basic conditions that dictate ones eligibility to the GST. Under GST Act, any person whose turnover crosses ₹20 lakh during a financial year except for few specified categories which have a threshold limit of ₹10 lakh in case of special category states, is mandatorily required to register for GST. Aggregate turnover refers to the total value of all CGS, except the value of those supplies which are specified as exempt supplies and exports and supplies on which the supplier is liable to pay tax.
2. Inter-State Supply
Any person who is in the business of making supplies of goods between two or more states and services needs to get registered for GST even if the turnover limit is exceeded. Inter –state supply is generally referred to as the situation where supply of goods or services takes place between two different states or union territories. For instance, suppose a company located in the Maharashtra state is supplying products to a customer in Karnataka then it forcibly has to register for GST.
3. E-Commerce Operators
The e-commerce operators who provide the facility for supply of goods or services also needs to register for GST irrespective of their turnover. This law applies to marketplaces that are involved in selling products or services from one or more individuals or companies such as Amazon, Flipkart and others. It means that any such operators who provide platforms for sellers to conduct their sales and purchases must own the GST for the given sellers.
4. Casual Taxable Persons
Casual taxable persons are those people or other legal entities who registered for GST just for making occasional and/or temporary taxable supply in the state in which they have no fixed place of their business. This applies to companies that use their properties for exhibitions, fairs, temporary shows or any other form of similar event.
5. Non-Resident Taxable Persons
Any person making taxable supply of goods or services from a place outside India to a person located in India is eligible for registration for GST. Such as persons or companies that have no business establishment in India but operate in the country. New GST registration by a supplier of goods or service is carried out only when a non-resident intends to make a taxable supply.
6. Certain Specified Persons
There are also invoices that no matter their turnover, they have to register for GST. This includes:
• Input Service Distributors: Companies issuing to their divisions or departments input tax credits.
• Agents: Suppliers and service providers on behalf of themselves or on behalf of their principals.
• Tax liable entities engaged in the selling of goods and services through an online marketplace are also need to be registered for GST even if its turnover is very low.
Conclusion
It is crucial for all types of businesses engaged in activities in India to get acquainted with the GST registration in India eligibility requirements. Through GST compliance the following benefits are accrued to the business; tax benefits, legal recognition hence promoting the stability of the business. To avoid falling foul of the taxation regime, every whether you are a start-up or a large company it is important to regularly update oneself on the GST laws.
As the editor of the blog, She curate insightful content that sparks curiosity and fosters learning. With a passion for storytelling and a keen eye for detail, she strive to bring diverse perspectives and engaging narratives to readers, ensuring every piece informs, inspires, and enriches.
