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Eager to launch your business with optimal Goods and Service Tax (GST) compliance? Don’t wait! Reach out to the Apki Return Team now for expert assistance in navigating GST regulations for a successful business start.
GST stands for Goods and Services Tax and is a type of tax applied to the sale of goods and services in India. The main purpose of GST is to simplify the tax system by replacing multiple taxes with a single, unified tax. This helps to reduce tax evasion and create a seamless market across the country. GST is applied at each stage of the supply chain but businesses can claim credit for taxes paid on inputs, making the final tax burden on consumers lighter. The goal of GST is to increase revenue and support economic growth. GST was introduced with the prime objective of “ONE NATION: ONE TAX” motto, which will cover all the 3 major sectors i.e., Manufacturing, Trading & Service industries.
GSTIN stands for Goods and Services Tax Identification Number. It is a unique 15-digit number assigned to every taxpayer registered under the GST regime in India. The GSTIN is used to identify taxpayers and to track their transactions.
The structure of GSTIN consists of 5 Parts:
The process of GST (Goods and Services Tax) registration in India in 2024 can be outlined in several key steps:
Before applying for GST registration, it’s important to understand the process and its significance for businesses in India.
Typically, businesses with an annual turnover exceeding Rs. 40 lakhs (Rs. 10 lakhs for special category states) and for Services exceeding Rs 20 Lakhs are required to register for GST.
You will need to collect necessary documents including your PAN card, proof of business registration, identity and address proof of promoters, bank statements and photographs.
Visit the official GST portal and click on “Services”, then “Registration”, and select “New Registration. Accurately provide all required details in the GST REG-01 form, including business name, PAN, email and mobile number.
After form submission, you’ll receive a Temporary Reference Number (TRN). Use this TRN to complete the application within 15 days.
GST authorities will review your application and may request additional information or clarification.
Once the verification is successful, you will be issued a GST registration certificate, which includes your GSTIN (GST Identification Number).
Individual Business
PAN card, Aadhaar card, bank account statement or cancelled cheque, passport-size photograph
Partnership Business
PAN card of the firm, partnership deed, Aadhaar cards of all the partners, bank account statement or cancelled cheque of the firm, passport-size photograph of all the partners
Company
PAN card of the company, company incorporation certificate, Memorandum and Articles of Association, Aadhaar card of the authorised signatory, bank account statement or cancelled cheque of the company, passport-size photograph of the authorised signatory
Non-resident Business
PAN card of the non-resident, passport, Aadhaar card or any other proof of address, bank account statement or cancelled cheque, passport-size photograph
Regular Registration:– Regular GST registration is a one type of GST Registration where every supplier engaged in the provision of goods, services, or both is required to get registered when a supplier’s aggregate turnover surpasses a certain threshold limit in a financial year. The registration must be obtained for each state or union territory where the supplier conducts taxable transactions.
The taxpayers registered under regular GST are required to pay taxes on monthly basis and file returns on quarterly basis up to turnover of Rs 5 crores and pay taxes and file returns on monthly basis for business with turnover above 5 crores. A Taxpayer can claim the input of Tax paid on purchases/services.
Composition Registration:- A Composition taxpayer is an individual or entity registered under the Composition Scheme. This scheme allows eligible taxpayers to pay GST at a nominal or lower rate, rather than the standard rates however under this scheme taxpayers can’t take input of credit paid on purchases/services.
The payment is made to the government based on their turnover or receipts, and it’s done quarterly while filing Form CMP-08. the eligibility to opt into this scheme was restricted to those with an annual turnover of up to Rs. 1.5 crore for Supplier of Goods and up to 50 Lakhs for Service Providers. The Rates of Composition is given below: –
| Category | Rates |
|---|---|
| For goods manufacturers and traders: | 1% |
| For restaurants not serving alcohol | 5% |
| For service providers | 6% |
Reverse Charge Mechanism:- Reverse Charge Mechanism (RCM) in GST is a unique provision where the liability to pay tax shifts from the supplier to the recipient of goods or services. This mechanism is introduced under the GST regime to cover certain specified supplies and transactions like Goods Transport Agency, Security Agency Services, Rent of Commercial Activity carried on Residential Property etc. The recipient, who pays GST under RCM, can claim the amount as input tax credit, subject to eligibility conditions.
The Goods and Services Tax (GST) is a unified national tax introduced in India in 2017. It replaced a multitude of indirect taxes levied on goods and services previously levied by the central and state governments. GST applies to the supply of most goods and services across India and aims to simplify the tax system and make it more efficient.
GST is levied on the value added at each stage of the production and distribution chain of goods and services. The final consumer pays the tax embedded in the price of the product or service. The government collects the tax and distributes it to the central and state governments based on a pre-determined formula.
There are five main GST rates:
Businesses with a turnover exceeding Rs. 20 lakhs (Rs. 40 lakhs for businesses in certain special category states) are required to register for GST. Even businesses with a lower turnover may need to register if they supply goods and services inter-state or if they are involved in certain specified activities.
GST has several benefits, including:
Input Tax Credit (ITC) allows businesses to offset the GST paid on their purchases against the GST liability on their sales. Claiming ITC can significantly reduce your overall tax burden. To claim ITC, you need to ensure that you have received a proper GST invoice from your supplier and that the item or service purchased is eligible for ITC. You can then claim the ITC by filing your GST returns online.
If your business is required to register for GST but you fail to do so, you may face several penalties, including:
Remember, complying with GST regulations is crucial for avoiding penalties and ensuring the smooth operation of your business.
You can register for GST online through the GST portal.
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