What are the Benefits of GST Registration?
Following are the merits of opting for GST registration in India:
- Simplified Taxation Services
GST has helped to integrate the Indian market by bringing together
numerous indirect taxes under a single regulator.
- Lower Prices for Goods and Services
The cascading impact of numerous taxes and VATs was eliminated with the
implementation of GST, which decreased the cost of goods and services.
Assists in preventing time-consuming tax services
Small businesses benefit from GST registration since it lets them avoid
time-consuming tax services as service providers and products suppliers
with annual sales value below the threshold of Rs. 20 lakh and Rs. 40 lakh
respectively are exempt under GST.
Trying to Cut Down on Corruption and Sales Without Receipts
GST was implemented in order to eliminate fraud and unreceipted sales. As
an added benefit, it assists in lowering the amount of indirect taxes that
small businesses must pay.
- Process of Taxation is uniform
GST registration provides for centralised registration and brings
uniformity to the taxes process, thereby facilitating online filing of tax
returns by businesses.
- Limit for Registration is higher
A business in India that had a revenue of more than Rs 5 lakh was formerly
required to pay VAT. Also, service providers with turnover below Rs 10
lakh were excused from the ambit of service tax. Contrarily, under the GST
regime, this barrier has been raised to Rs 20 lakh, exempting many small
business owners and service providers.
- Small Business Composition Scheme
Small businesses with a revenue between Rs 20 lakh and Rs 75 lakh
significantly gain from GST as it offers an opportunity to reduce taxes by
using the scheme of composition. As a result, the tax and compliance
burden for many small firms has come down.
Prior to this, there were separate returns and compliances for the VAT and
service tax. On the other side, under GST, only one consolidated return
needs to be submitted.
- Helpful for unorganised sector
Prior to GST, certain industries in India, such as textile and building
construction, were mostly unorganised and uncontrolled. However, since the
introduction of GST, certain provisions for electronic filing and payment,
claiming single input credit have been made possible.
What are the Various Types of GST?
The following GST classifications are commonly observed in India:
Central GST (CGST):
CGST is the term used for Central Goods and Services Tax, which is levied
by the central government on intrastate sales of goods.
State GST (SGST):
SGST i.e. State Goods and Services Tax is collected by the State
Government and imposed on transactions occurring within the state's
administrative boundaries. Although the specific characteristics of SGST
may vary from state to state due to individual state laws, the
classification of products and services, valuation and taxable events are
Union Territory GST (UTGST):
UTGST i.e. Union Territory Goods and Services Tax applies to
business transactions in Union Territories for both goods and services, in
addition to CGST. In Union Territories such as Andaman and Nicobar
Islands, Lakshadweep, Daman Diu, Chandigarh and Dadra & Nagar Haveli,
IGST is imposed on the supply of goods.
The GST levied on transactions between two states, including exports,
imports and interstate supply of goods and services, is known as
interstate GST or integrated goods and services tax (IGST). The collection
of IGST is done by the central government in India.
What are the Eligibility Criteria for GST Registration?
The following below mentioned person/entities are required to get
registered with GST:
Aggregate turnover exceeding Rs 40 lakhs (the threshold is Rs 20 lakhs
for states coming under special category status) in a financial year
Entities registered under earlier taxation laws (Excise, VAT, Service
Tax, etc.) must register with GST
- Inter-state suppliers of goods
- Casual taxable persons
- Taxpayers under reverse charge mechanism
- Input service distributor and its agent
- E-commerce operators or aggregators
- Non-resident taxable persons
- Agents of a supplier
- Persons supplying through e-commerce aggregators
Entities providing online information, acquiring database or retrieval
services from outside India to a person in India (excluding registered