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What is GST Registration
Under Goods And Services Tax (GST), businesses whose turnover exceeds the threshold limit of Rs.40 lakh or Rs.20 lakh or Rs.10 lakh as the case may be, must register as a normal taxable person. It is called GST registration.
For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it is an offense under GST and heavy penalties will apply.
GST registration usually takes between 2-6 working days. Team Clear can help you obtain GST registration faster in 3 easy steps.
What are the components of GST?
GST will have 3 tax components, which includes a central component (Central Goods and Services Tax or CGST) and a state component (State Goods and Services Tax or SGST) where centre and state will levy GST on all entities, i.e. when a transaction happens within a state. Inter-state transactions will attract the Integrated Goods and Services Tax (IGST), to be levied by the centre, i.e. when a transaction happens one state to another.
What is the input tax credit?
Input tax credit lets you reduce your tax you have already paid on inputs and pay the remaining amount at the time of paying tax.
You pay taxes on the purchase when a product is purchased from a registered seller, and when you sell the product, you too collect the tax. With input credit, you can adjust the taxes paid at the time of purchase with the amount of tax on sales (output tax) and pay the balance liability of tax, i.e. tax on sale minus tax on the purchase.
Who needs a GST Registration?
Every business or corporation that are involved in the buying and selling and good of services have to register for GST. It is mandatory for companies whose turnover is more than Rs.20 lakhs (for supply of services) and Rs. 40 lakhs ( for supply of goods) yearly to register for a GST.
All businesses making interstate outward supplies of goods have to register for a GST too. The same applies to businesses making taxable supplies on behalf of other taxable persons, example Agents and Brokers.
Also, as per the recent notification, e-commerce sellers/aggregators need not register if total sales are less than Rs.20 lakhs.
What are the GST tax rates?
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Items that are considered basic necessities come under exempt list i.e. they are not taxed.
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Household necessities and life-saving drugs etc. are taxed at 5%.
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Products like computers and processed food are taxed at 12%.
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Hair oil, toothpaste and soaps, capital goods, industrial intermediaries and services are taxed at 18%.
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Luxury items are taxed at 28%.
You can see the tax rates for all the products here: https://cbec-gst.gov.in/gst-goods-services-rates.html
Check out the GST calculator which comes in handy to calculate the Goods and Service Tax using different slabs.
What is a GST Return?
A GST return is a document containing details of income that is required to be filed as per the law with the tax authorities. Under the GST law, a taxpayer has to submit two returns on a monthly basis and one such return annually. All returns have to be filed online. Please note that there is no provision for revising the returns. All invoices for the previous tax period that went unreported must be included in the current month.
Under GST, a registered dealer has to file GST returns that include: Purchases, Sales, Output, GST (On sales) and Input tax credit (GST paid on purchases).
What is GSTIN?
GSTIN is a unique identification number given to each GST taxpayer. To verify a GSTIN number a person who has a GST number can log onto the GST portal.
Documents for Online GST registration
The list of documents required for registration of GST for various business are as follows:
Proprietorship
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PAN Card and address proof of proprietor
LLP
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PAN Card of LLP
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LLP Agreement
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Partners’ names and address proof
Private Limited Company
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Certificate of Incorporation
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PAN Card of Company
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Articles of Association, AOA
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Memorandum of Association, MOA
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Resolution signed by board members
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Identity and address proof of directors
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Digital Signature
The following can be shown as proof of address of a director:-
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Passport
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Voter Identity Card
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Aadhar Card
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Ration Card
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Telephone or Electricity Bill
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Driving License
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Bank Account Statement
Add what works as identity proof, One can use a PAN Card, Aadhar Card as identity proof. For address proof, any of the director’s can show their voters ID, passport, telephone bill, electricity bill and telephone bill.
GST Return Filing
A GST Return Filing is a return document that contains details of the income of the taxpayer. It has to be filed with the GST administrative authority. The document is used tax authorities to calculate the tax liability of a GST taxpayer. A GST Return Filing form has to include the following details.
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Output GST (On sales)
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Sales
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Input tax credit (GST paid on purchases)
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Purchases
For filing a GST Return, you need to have GST compliant sales and purchase invoices attached.
Penalty for not obtaining GST registration
An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000.
The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes
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