Goods & Services Tax is an indirect tax used in India on the supply of goods and services. It is a comprehensive, multistage, destination – based tax comprehensive because it has subsumed almost all the indirect except a few state taxes.
Types of GST & Rates:-
- CGST – CENTRAL TAX AND SERVICE TAX
CGST is levied by the central government on intra-state goods and service transactions. The central government collect the revenue generated through central goods and Service tax. It is levied along with SGST or UGST and revenues are shared between the state and the center.
- SGST – STATE GOODS AND SERVICE TAX
SGST is levied by the state government on intra-state goods and service transactions. The revenue collected through State goods and Service tax is earned by the state government where the transaction is made. SGST subsumes earlier taxes such as VAT, entertainment tax, luxury tax, octroi, tax on lottery and purchase tax.
- IGST – INTEGRATED GOODS AND SERVICE TAX
Integrated Goods and service tax is the tax levied on inter-state goods and service transaction. It is applicable on imports and exports as well. Under IGST, the taxes charged are shared by both the centre and state wherein the goods and services are consumed.
- GST Tax of 5%
Goods – The goods which will attract a taxation of 5% under GST include skimmed milk powder, fish fillet, frozen vegetables, coffee, coal, fertilizers, tea, spices, pizza bread, kerosene, ayurvedic medicines, agarbatti, sliced dry mango, insulin, cashew nuts, unbranded namkeen, lifeboats , Ethanol- Solid biofuel pellets- Handmade carpets and other handmade textile floor coverings (including namda/gabba)- Hand-made braids and ornamental trimming in the piece
Services – Small restaurants along with transport services like railways and airways, Standalone ACs non-ACs Restaurants and those which serve liquor, Takeaway Food, Restaurants in hotels with a room tariff less than INR 7,500 (no input credit for these restaurants), will come under this category. Special flights for pilgrims (Economy Class) come under 5%
- GST Tax of 12%
Goods – Items coming are the tax slab of 12% include frozen meat products, butter, cheese, ghee, pickles, sausage, fruit juices, namkeen, tooth powder, medicine, umbrella, instant food mix, cell phones, sewing machine, man-made yarn, -Handbags including pouches and purses; jewellery box, Wooden frames for painting, photographs, mirrors etc, Ornamental framed mirrors, Brass Kerosene Pressure Stove, Art ware of iron, etc.
Services – Business class air tickets will attract a tax of 12% under GST. The slab also includes movie tickets priced under INR 100
- GST Tax of 18%
Goods – As mentioned above, most of the items are part of this tax slab. Some of the items are flavored refined sugar, cornflakes, pasta, pastries and cakes, detergents, washing and cleaning preparations, safety glass, mirror, glassware, sheets, pumps, compressors, fans, light fitting, chocolate, preserved vegetables, tractors, ice cream, sauces, soups, mineral water, deodorants, suitcase, brief case, vanity case, oil powder, chewing gum, hair shampoo, preparation for facial make-up, shaving and after-shave items, washing powder, Refrigerators, Water Heaters, Washing Machines, Televisions (up to 68 cm), Vacuum Cleaners, Paints, Hair Shavers, Hair Curlers, Hair Dryers, Scent Sprays, Lithium-ion batteries, detergent, stones used in flooring, marble & granite, sanitaryware, leather clothing, wrist watches, cookers, stoves, cutlery, telescope, goggles, binoculars, oil powder, cocoa butter, fat, artificial fruits, artificial flowers, follage, physical exercise equipment, musical instruments and their parts, stationery items like clips, some diesel engine parts, some parts of pumps, electrical boards, panels, wires, razor and razor blades, furniture, mattress, cartridges, multi-functional printers, door, windows, aluminium frames, monitors and television screens, tyres, power banks for lithium ion batteries, video games, carriage accessories for disabled, etc
Services – Restaurants located inside hotels with tariffs of INR 7,500 and above, outdoor catering(input tax credit to be available), movie tickets priced above INR 100, actual bill of hotel stay below INR 7,500, IT and Telecom services and financial services along with branded garments will be part of this tax slab.
- GST Tax of 28%
Goods – Over 200 goods will be taxes at a rate of 28%. The goods which will be part of this category under GST are sunscreen, pan masala, dishwasher, weighing machine, paint, cement, vacuum cleaner. Other items include automobiles, hair clippers, motorcycles.
Services – As mentioned above, five-star hotels, whose actual bill of hotel stay above INR 7,500, racing, movie tickets and betting on casinos and racing will come under this category.
Process of GST Registration
Step – 1: Go to GST portal.
Step – 2: Click on the ‘Register Now’.
Step – 3: Select ‘New Registration’.
Step – 4: Fill the below-mentioned details.
- Under the ‘I am a’ drop-down menu, select ‘Taxpayer’.
- Select the respective state and district.
- Enter the name of the business.
- Enter the PAN of the business.
- Enter the email ID and mobile number in the respective boxes. The entered email ID and mobile number must be active as OTPs will be sent to them.
- Enter the image that is shown on the screen and click on ‘Proceed’.
Step – 5: On the next page, enter the OTP that was sent to the email ID and mobile number in the respective boxes.
Step – 6: Once the details have been entered, click on ‘Proceed’.
Step – 7: You will be shown the Temporary Reference Number (TRN) on the screen. Make a note of the TRN.
Step – 8: Visit the GST portal again and click on ‘Register’ under the ‘Taxpayers’ menu.
Step – 9: Select ‘Temporary Reference Number (TRN)’.
Step – 10: Enter the TRN and the captcha details.
Step – 11: Click on ‘Proceed’.
Step – 12: You will receive an OTP on your email ID and registered mobile number. Enter the OTP on the next page and click on ‘Proceed’.
Step – 13: The status of your application will be available on the next page. On the right side, there will be an Edit icon, click on it.
Step – 14: There will be 10 sections on the next page. All the relevant details must be filled, and the necessary documents must be submitted. The list of documents that must be uploaded are mentioned below:
- Business address proof
- Bank details such as account number, bank name, bank branch, and IFSC code.
- Authorization form
- The constitution of the taxpayer.
Step – 15: Visit the ‘Verification’ page and check the declaration, then submit the application by using one of the below mentioned methods:
- By Electronic Verification Code (EVC). The code will be sent to the registered mobile number.
- By e-Sign method. An OTP will be sent to the mobile number linked to the Aadhaar card.
- In case companies are registering, the application must be submitted by using the Digital Signature Certificate (DSC).
Step – 16: Once completed, a success message will be shown on the screen. The Application Reference Number (ARN) will be sent to the registered mobile number and email ID.
Step – 17: You can check the status of the ARN on the GST portal.
GST Registration Documents Checklist
Category of persons
Documents required for GST registration
|Sole proprietor / Individual||
|Partnership firm (including LLP)||
|Company (Public and Private) (Indian and foreign)||
Benefits of GST Registration
- Elimination of the cascading tax effect
Following the implementation of the Goods and Services Tax, all the taxes have been brought under a single umbrella. What this essentially means is that the cascading tax effect has been eliminated. For instance, before the GST law was introduced, if a consultant offered his services for an amount of Rs.40,000 and levied a service tax of 14% (Rs.5,600), and then purchased office supplies worth Rs.15,000 and paid VAT at 5% (Rs.750), his total outflow would be Rs.5,600 + Rs.750 = Rs.6,350.
Following the implementation of GST, the GST rate applicable to the service would be 18%. If the service was offered for Rs.40,000, the GST on it would be Rs.7,200. The Rs.750 spent on office supplies would be deductible, which makes the total outflow Rs.7,200 – Rs.750 = Rs.6,450.
- Higher threshold
In the previous tax structure when VAT was charged, businesses that generated turnovers in excess of Rs.5 lakh were liable to pay VAT. It is also important to note that service providers who generated a turnover of up to Rs.10 lakh were exempt from Service Tax. However, the threshold for registration under GST is Rs.20 lakh, which means that many small service providers and traders need not register.
- Simple procedure
The whole GST process, starting from registration and ending with filing returns, is done online. It is a simple procedure that can be followed even by individuals with minimal technical know-how. Registering under GST is especially simple because there is no need to run around for multiple registrations like Service Tax, Excise Duty, VAT, etc.
- Composition scheme
Small businesses that earn turnovers between Rs.20 lakh and Rs.75 lakh can benefit under the new tax regime as the Composition Scheme can help in lowering their taxes. The compliance as well as tax burden on small businesses has significantly reduced thanks to the implementation of GST.
- Fewer complications
The previous tax regime had Service Tax and Value Added Tax, and each of these taxes had their own compliances and returns. For instance, Excise Duty return filing had to be done on a monthly basis, while Service Tax return filing had to be done on a monthly basis for companies and LLPs, and on a quarterly basis for partnerships and proprietorships. Value Added Tax was different in different states, which resulted in inconsistencies across the country. The implementation of GST has ensured that all businesses pay a uniform tax for the supply of goods and services.
- E-Commerce operators no longer suffer from differential treatment
Prior to the implementation of the Goods and Services Tax, there was no proper definition for the supply of good via an e-commerce portal. There were multiple VAT laws. For instance, deliveries though online portals such as Amazon and Flipkart to states like Uttar Pradesh required the filing of a VAT declaration. The registration number of the vehicle that was delivering the product would also have to be mentioned, and tax authorities had the power to seize products in case proper documents were not produced.
GST has effectively done away with such confusing compliances and differential treatments. The e-commerce sector now has clearly defined provisions that make it easier to engage in the supply of products across states.
- Regulation of the unorganized sector
Everything About GST Registration
Goods and service tax (GST) says that businesses whose turnover exceeds Rs. 20 lakhs are eligible to register as a normal taxable individual. In case of North-Eastern or Hill States, the limit is 10 lakhs to come under the bracket of taxable business. These businesses which comes under taxable brackets are liable to register under GST.
The entire procedure that a business undergoes is known as GST registration. There are certain businesses for whom GST registration is mandatory. In case they are not registered for GST, there may apply heavy penalties that the company is liable to pay to the government. For these businesses to stay away from offence, they need to register for GST as a priority.
- A business having a turnover of 20 lakhs or more; 10 lakhs or more in case of south- eastern or hill states.
- Individuals registered in pre-GST laws (Excise, VAT, Service Tax, etc.).
- Casual taxable individual.
- Non-Residents liable for taxation.
- Agents of supplier;
- Individuals or businesses who supplies through e-commerce platforms.
- Individuals and businesses paying tax under reverse charge mechanism.
- E-commerce aggregator.
- Individual or business supplying information or database to person in India from outside India.
✓ Person or business exempt under GST or IGST Act.
✓ An agriculturalist.
✓ Person or business issued special category by the government.
There is a procedure to register for GST in India. Let us have a look at the steps in which GST can be registered.
A. Details to be provided:
There are various details that needs to be provided before initiating the GST registration process. Below are the details that needs to be declared:
✓ Mobile number;
✓ E-mail Id;
✓ State or Union Territory.
The above details are to be filled in Part A of form REG-01 on the portal. In case if Commissioner is appointed to carry out the process, these details needs to be sent directly to the Facilitation Centre.
B. Obtain Reference Number:
Once PAN has been verified, a temporary reference number is generated that should be conversed to the applicant.
C. Formal Application:
Using the above information, the applicant then needs to fill the application form. Part B of Form GST 01 has needs to be verified through electronic verification code or duly signed along with the required documents.
D. Required Documents:
The documents required for various types of companies differ from each other. However, the documents needed altogether are summarized below:
✓ Incorporation certificate or proof of registration;
✓ PAN of the applicant;
✓ Aadhar Card;
✓ Digital Signature;
✓ Letter of Authorization or Board Resolution;
✓ Cancelled Cheque or Bank Account Statement;
✓ Address Proof of Business;
✓ Identity and Address proof of Directors.
Each business falling under GST or IGST Act are liable to register and pay GST. In case any of the individual or business are not registered under GST, there are high amount of penalties charged by the government.
The offender is liable to pay 10% of the due tax amount subject to minimum of Rs. 10,000. This may rise to 100% if the offender has evaded tax with wrong intentions.
- Business can obtain input tax credit;
- Interstate sales can be made without any restrictions;
- Reduced tax liability;
- Limited compliance;
- Competitive advantage as compared to other businesses;
- Increased working capital;
- A business can register on e-commerce website.
Please fill the form to get your GST applied
Can this be done online
Who needs to take registration?
- Any business whose turnover in a financial year exceeds Rs 20 lakhs (Rs 10 lakhs for North Eastern and hill states).
- Note: If your turnover is supply of only exempted goods/services which are exempt under GST, this clause does not apply.
- Every person who is registered under an earlier law (i.e., Excise, VAT, Service Tax etc.) needs to register under GST, too.
- When a business which is registered has been transferred to someone/demerged, the transferee shall take registration with effect from the date of transfer
- Anyone who drives inter-state supply of goods
- Casual taxable person
- Non-Resident taxable person
- Agents of a supplier
- Those paying tax under the reverse charge mechanism
- Input service distributor
- E-commerce operator or aggregator
- Person who supplies via e-commerce aggregator
- Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person
When is DSC required?
In case companies are registering, the application must be submitted by using the Digital Signature Certificate (DSC).
What is composition scheme
Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore.
What is meant by reverse charge?
Reverse charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply. This means that the GST will have to be paid directly by the receiver to the Government instead of the supplier.
What is ARN in GST?
ARN is an acronym of Application Reference Number (ARN) which is created at the time of submitting enrollment application that is signed electronically or Digital Signature (DSC) at GSTN Portal. … After submitting the enrollment application successfully at the GST System Portal, ARN number will be created automatically.
Minimum turn over
Limits – For Sale of Goods
|Exceeds Rs.40 lakh||Yes – For Normal Category States|
|Exceeds Rs.20 lakh||Yes – For Special Category States|
Limits – For Providing Services
|Exceeds Rs.20 lakh||Yes – For Normal Category States|
|Exceeds Rs.10 lakh||Yes – For Special Category States|
When to apply for multiple registration?
If a person carrying on a business in two different states say Delhi, Mumbai and liable for registration under this act, then the person has to apply for registration in each such state and GST registration will be granted accordingly. Since GST registration is based on PAN, GST registration will be granted in each such state under the same PAN number of the person.