What is GST (Goods and Services Tax)?
GST is an indirect tax, it is also known as one tax for the entire nation, which will help in making India one unified common market. It is a multi stage and destination based tax. Basically, the tax regime which was initiated by the UPA government, but was bought into force by the Narendra Modi government .Under the GST Concept, the tax will be levied at every point of sale. In case of interstate sales, Central GST and State GST will be charged, whereas the Intra-state sales will be chargeable only on the Integrated GST.
Who requires GST?
Any business whose turnover exceeds the basic threshold limit of Rs. 20 lakhs or any business based in North Eastern and hill states the threshold limit is Rs. 10 lakhs will have to get itself registered under the GST.
Further, other Business registered under various pre GST laws for instance Excise Tax, Service Tax have to get themselves registered under GST by default.
Business required to be registered under the GST irrespective of their turnover
i. The Persons making inter-state taxable supplies
Any Inter-state supply of goods or services from a state to another state has to be registered any GST regime, that is in other words-any person who is supplying goods and services to person outside the State, you are required to obtain the GST registration number.
ii. Persons who are required to pay tax under reverse charge
Under the GST registration, most of the goods and services, the liability for payment of tax is upon the supplier. Whereas, in certain cases, the liability to pay GST rests with the recipient of the services, instead of the supplier, these transactions are known as the reverse charge. Therefore, under reverse charge registration under GST is mandatory.
iii. Non-resident taxable persons making taxable supply
All the Non-resident persons who are supplying goods and services to recipients based in India; occasionally, but they do nota fixed place of business in India. Therefore, in this case all non-residentpersons are mandatorily required to obtain the GST registration.
iv. Input Service Distributor
The term Input Service Distributor means the supplier of goods and services which receives the tax invoice for the receipt of the input services and issues a prescribed document for the purposes of distributing the credit of the central tax, State tax or Union territory tax paid over the services to the supplier of taxable goods and services.
v. Electronic Commerce Sector
The E-commerce deals with the supply of the goods or service, including the digital products over the digital network. An electronic commerce operator is aperson who owns and manages digital facility for electronic commerce. All E-commerce vendors are required to obtain the GST registration.
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Benefits of Goods And Services Tax:
· The GST introduced simple procedures for the registration of taxpayers, refund of taxes, uniform formats of tax return, common tax baseand services will lend greater certainty to taxation system.
· GST has harmonized the rates of tax and the procedures.
· It enhances better neutralization of taxes especially for exports resulting in making our products more competitive in the international market and boost the Indian Exports.
· Improve the overall investment climate in the country which will naturally benefit the development in the states.
· The overall average tax burden on companies is reduced which will result in the reduction of prices and lower prices means more consumption, which means more production which leads to helping in the growth of the industries. This will create India as a “Manufacturing hub”.
· GST will improve the compliance of the all returns to be filed online, input credits to be verified onlineand also in encouraging more paper trail of transactions.
· GST will prevent cascading of taxes as Input Tax Credit, It will be available throughout the goods and services at each and every stage of the supply.
· The concept of GST will result in more efficient neutralization of taxes especially for the exports thereby making your products more competitive in the international market and boosting the Indian Exports.
· GST increases the transparency, efficiency, compliance and ramp up the GDP growth to the Centre, state and the country at large. You can learn more about benefits, applicability and become certified GST Professional with many GST Courses online.
What are the implications in case you don’t register for GST?
The GST act, 2017 enumerates various implications for not registering under the GST, as there is a provision of direct penalty for failure to take GST registration in India and similarly it is levied in case of late registration of GST.
The section122 of CGST act clearly states that any taxable person who fails to take GST registration although he was liable to be registered under the act, then the penalty of Rs.10,000 or amount of tax evaded or any short tax liability whichever is in higher amount.
Further, if in any case any person who fails to take GST registration and the total tax liability after calculation comes to Rs.2 lakh, then the penalty for failure to take GST registration shall be 2 lakh or Rs.10,000 whichever is higher and hence, the penalty should be levied.
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