What is GST Registration?
Proper and perfect registration under the GST Act, is referred to as GST Registration. The GST (Goods & Services Tax) Act is all about the formulation, implementation, maintenance, and regulation of the rules and provisions related with goods and services tax applicable to various goods and services produced in all economic sectors. This webpage contains very informative and useful information about GST in India, essentially including answer to the question "what is gst registration?", to help Indian and foreign entities in doing business in entire India smoothly and lawfully.
GST of India is being seen as one of the biggest and most significant reforms related with taxation in the country till date. This GST is a unified indirect tax across the country to be levied at the prescribed rate on different goods and services and at different stages of the supply chain, based on the amount of value addition at each stage. At present in India, there are four prescribed rates of GST applicable separately for different categories of goods/products and services; these four tax slabs are the following --- 5%, 12%, 18%, and 28%. This GST is levied on the manufacture, sale/purchase, and consumption of various goods/products as well as services, and at all stages of transaction during the entire supply chain. Again, this single tax (collected at multiple points/stages) replaces and subsumes all various indirect taxes and levies which were previously taken/charged at these all stages by the relevant State and Central Governments. Thus, GST is aimed at eliminating the cascading effect of various indirect taxes which were levied at different stages of the supply chain, promulgating a certain rate of taxation for any specific product/service in all States and UTs across India, and at improving tax compliance & transparency and the ease of doing business in India. Apart from boosting revenue receipts of the Central and State governments, GST is hoped to accelerate the growth of national GDP by 1.5-2%, according to experts. Other benefits of gst are stipulated separately under the last section on this webpage.
India has adopted the dual system of GST (like Canada and Brazil), to keep the Central and State governments fiscally independent of each other. At the intra-State level (goods/services sold within the State), GST has two equal components of the Central and State GST, as the CGST (Central Goods and Services Tax) and the SGST (State Goods and Services Tax). On the other hand, at the inter-State level including imports and exports of goods and services, the IGST (Integrated GST) shall be levied and collected by the Central government. At every stage of transaction during the supply chain, GST is paid by immediate buyer/customer, and is then remitted to the governments by the entity selling that product or service. To ensure that tax is levied only on the amount of value addition at each stage of the supply chain, credit of the input taxes paid at all previous stages is granted as set-off. Hence, the final customer/consumer will bear only the GST charged by the last dealer/seller in the supply chain, with set-off benefits at all the previous stages.
Which Taxes will GST Replace?
Came into effect from 1st July 2017, GST will replace and subsume the following indirect taxes, which were earlier being levied by both the Central and State governments of India:(A) Taxes which were levied and collected by the Central Government
- Central Excise duty
- Additional Duties of Customs (commonly known as CVD)
- Special Additional Duty of Customs (SAD)
- Service Tax
- Central Cesses and Surcharges
- State VAT
- Central Sales Tax
- Entertainment and Amusement Tax (except when levied by the local bodies)
- Taxes on lotteries, betting and gambling
- State Cesses and Surcharges
- Luxury Tax
- Taxes on Advertisements
What is GSTIN?
Starting from "what is GSTIN?", this section gives exclusive information about GST Registration Applicability, and gst registration requirements, to help all concerned entrepreneurs and economic entities doing business/service in India. GSTIN (Goods and Services Taxpayer Identification Number) is a unique 15-digit State-wise PAN-based number, which identifies an economic entity duly registered under GST. As per the latest news, GST registrations re-opened from 25th June 2017, and will continue for next Three Months. Registration under GST has been made compulsory within 30 days, by the applicable individuals and entities of India.
All small and large manufacturers, traders, suppliers, wholesalers and retailers, importers and exporters belonging to India or doing business in India, are required to obtain proper registrations under GST, if their respective annual turnover exceeds the prescribed minimum threshold (excepting those who are allotted a UIN). These economic entities may be engaged in buying or selling of goods/products, or providing services, or both. In general, whenever the annual turnover of a business/service crosses INR 20 Lakh (Rs. 2 million), it compulsorily needs to get registered under GST. For North-Eastern States and other Special Category Statesof India (such as Himachal Pradesh, Uttarakhand, etc.), this threshold has been kept at INR 10 Lakh (Rs. One million). It must be noted that, GST is strictly applicable on inter-State trades irrespective of this minimum threshold limit. Again, an entrepreneur or entity with multiple business/service verticals in any State, is required to obtain a separate GST registration in the State for each vertical. Without GST registration, any economic entity is not entitled to collect GST from customers or claim any input tax credit (ITC) paid previously. Chapter 6 of the GST Act gives info about the people and entities required to get registration under GST.
It must be noted that every applicable person/entity is required to apply for GST registration within the concerned State, within 30 days from the date on which he becomes liable for GST registration. Registrations under GST will be State-wise. Casuals or non-residents need to apply for GST registration at least Five days before the commencement of their respective businesses. To login to the GST Common Portal (https://www.gst.gov.in ) applicants are necessitated to get first a Provisional ID and a Password from the CBEC/State Commercial Tax Departments. PAN is absolutely essential to apply for GST registration.
Benefits of GST
Ambitiously promulgated GST Act seeks to build a uniform tax structure nationwide, easier and transparent taxation regime, larger tax base and reduced tax related returns and compliances, better ease of doing business, and faster economic growth. This will also help in reducing red-tape and corruption, plugging leakages, and obscurities in the indirect taxation in India. The following are the main benefits offered by the GST system in India:
- A Unified Platform --- The whole nation will be following a unified and uniform tax structure, and thus, a single GST registration shall be sufficient across India for selling or purchasing goods/products or providing services.
- Subsuming of Various Indirect Taxes ---This will make tax collection and compliance easier for businesses and services located all across the country, eliminating the cascading effect of various indirect taxes.
- Larger Tax Base ---GST is very hopefully expected to increase the tax base in India significantly, with bigger revenues to the Central and State governments.
- Lower Taxes --- Under GST regime, GST liability occurs only when the turnover of any economic entity exceeds the threshold limit of Rs. 2 million (for northeastern States and other hilly States, this limit has been kept at Rs. One million). Again, GST can result in lesser magnitude of taxation, as compared to that in the earlier regime.
- Input Tax Credit (ITC) --- Credits of all input taxes paid at previous stages of the supply chain, will be granted as set-offs.
- Reduced Burden of Tax Returns & Compliances ---Returns and compliances associated with various indirect taxes which were being made in the earlier tax regime, will now get reduced considerably.
- Better Ease of Doing Business ---All above facilities/benefits, and the eliminated distinction between the goods and services under this GST regime, will help to make businesses and services in India easier and better.