GST: Everything You Need to Know

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WHAT EXACTLY IS GST?

The GST (Goods and Services Tax) is a tax on goods and services. This is a unified indirect tax in India that went into effect on July 1, 2017.

In essence, an indirect tax is one that is imposed on products and services rather than on income and profits.

The government collects taxes on business sales, and firms collect taxes from their consumers indirectly by charging the same tax on invoices. 

GST must be paid whether you offer goods, services, or both.

WHEN IS GST REGISTRATION REQUIRED BY LAW?

  • If your annual revenue is more than INR 40 lakhs. When your turnover surpasses INR 20 lakhs in the North Eastern States, you must register for GST.
  • If you sell items outside of the state where you live (inter-state trade), regardless of turnover.
  • If you’re selling your item on an e-commerce site like Amazon, Flipkart, or Snapdeal,
  • If you’re a buyer or a seller,
  • If you wish to send your customers a tax invoice,
  • If your company participates in an exhibition or event outside of the state as a casual taxpayer.

WHO SHOULD REGISTER FOR GST?

Despite the necessary provisions mentioned above, GST Registration can be done on a voluntary basis. GST registration not only allows you to be recognized as a legal registrant, but it also provides you with a number of advantages.

REGISTRATION FOR GST BENEFITS

  • Improve your competitiveness: Because you have a legal tax registration, such as a GSTIN, your business will be more competitive than unregistered competitors.
  • Online business expansion: You can’t sell goods or services on an e-commerce site until you’ve registered for GST. A GSTIN is required if you plan to sell on an e-commerce platform like Flipkart, Amazon, Paytm, Shopify, or your own website.
  • The input tax credit is available: Only registered GST holders can use the GST tax paid on their purchases as input and save money.
  • No limitations on selling throughout India: You can’t trade between states without a GSTIN. Only if your business is GST registered can you do this.
  • There are government tenders available: GSTIN is necessary when applying for government contracts. You can miss out on a business opportunity if you don’t have it.

IS THERE A PENALTY FOR FAILING TO REGISTER FOR GST?

If a business entity that is required to register under GST fails to do so or deliberately ignores the requirement, the business faces a penalty of either 100 percent of the tax payable or INR 10,000, whichever is higher.

WHAT EXACTLY IS GSTIN?

The GSTIN (Goods and Service Tax Identification Number) is a number that identifies a person’s tax status. When you have successfully applied for GST registration, this will be generated by the government.

WHEN DOES A COMPANY REQUIRE MULTIPLE GST REGISTRATIONS?

  • If a company entity supplies products and services in many states, it is necessary to register for GST in each state.
  • Furthermore, any company organization can apply for several GST registrations even if they operate under multiple verticals from a single state to prevent accounting complications.

AFTER GST REGISTRATION, WHAT ARE THE COMPLIANCES?

  • Increase the GST Invoices: Following GST registration, every business must issue a Tax Invoice for all products and services sold.
  • GST return submission: Businesses must file GST Returns on time after registering for GST. If you are registered under the standard GST plan, you must file your return on a monthly or quarterly basis. If you are registered under the composition system, you must file a quarterly GST return, subject to certain circumstances.
  • Taxes to be paid: Pay taxes on a monthly/quarterly basis depending on invoices sent to consumers on a monthly/quarterly basis.
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