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Well, any business that wants to legally sell goods or services and avoid tax troubles
Got goods to sell? Services to offer? If your annual turnover is ₹ 40 lacs or more for goods, or ₹ 20 lacs or more for services, then you’re in luck – it’s time to get registered for GST!
(Otherwise, the taxman might come knocking on your door and ask for a “small” donation to the government. And trust me, you don’t want that kind of attention unless you want to become a government’s ATM machine!)
Welcome to the exciting world of GST!
The Goods & Services Tax (GST) was launched on 1 July 2017 and applies to all Indian service providers, traders, and manufacturers, including freelancers. GST is a consolidation of various Central and state taxes like Service Tax, Excise Duty, CST, Entertainment Tax, Luxury Tax, Octroi, and VAT. Those with a turnover of less than ₹1.5 crore can choose a composition scheme and avoid complex GST formalities by paying at a fixed rate of turnover. GST is levied on all stages of the supply chain, from raw materials to the final sale to the consumer, regardless of the product’s origin and destination. So, if you’re selling tea from Darjeeling to someone in Kerala, the entire revenue will go to Kerala, not Darjeeling.
The Goods and Services Tax (GST) has three main components: CGST, SGST, and IGST.
To register for GST, businesses need to provide certain documents based on their entity type. Here are the document requirements for different business structures:
Don’t forget, double-checking the document requirements can save you from future headaches and stress!
The Following Can Be Shown as Proof of Address of a Director:
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
If any of these apply to you, then you need to register for GST services with the prescribed threshold limit of ₹20 lakhs for most businesses.
The GST Certificate is a must-have document that proves your business is officially registered under GST. It includes essential details such as your GST identification number, name, and address, and is required to charge and collect GST from your customers. This valuable document can also be used to avail input tax credits, apply for loans, and participate in tenders.
So ya, It’s like a superhero’s cape, except it doesn’t make you fly (unless you’re in the aviation industry, of course).
GSTIN, or Goods and Services Tax Identification Number, is a unique identification number assigned to each registered GST taxpayer in India. It is a 15-digit alpha-numeric code that serves as a distinct identification for the taxpayer for all their tax-related activities. The GSTIN can be verified by visiting the GST portal and entering the corresponding GST number. Verification of GSTIN is an essential step to ensure that businesses comply with GST regulations and maintain accurate records of their transactions.
The Goods and Service Tax Network (GSTN) is a non-governmental, non-profit, and privately-held company that operates as a one-stop-shop for all indirect tax-related needs. As a leading platform, the GSTN is tasked with maintaining and facilitating the Indirect Taxation platform for GST. This includes supporting businesses in the preparation, filing, rectification, and payment of their indirect tax liabilities. With its comprehensive services and resources, the GSTN serves as a valuable partner for businesses looking to navigate the complex world of indirect taxation.
Small businesses with turnover less than ₹20 lakh can choose to register for GST voluntarily. Voluntary GST registration comes with various advantages including the ability to take input credit, do inter-state selling without restrictions, register on e-commerce websites, and gain a competitive edge over other businesses. This can ultimately increase the margins and profits of voluntarily registered businesses.
Benefit from Input Credit: Under the GST system, input credit allows taxpayers to deduct the tax already paid on inputs while paying tax on the final product or service. This enables businesses to reduce their tax liability and retain more of their profits. Voluntarily registered businesses can enhance their margins and profitability through this mechanism.
Expand Inter-State Selling: Small and Medium Enterprises (SMEs) can unlock new growth opportunities by engaging in inter-state selling without facing any restrictions. This allows them to tap into a broader customer base and explore online platforms, ex
Tap into E-commerce Platforms: Registering on e-commerce websites offers SMEs the chance to expand their market presence significantly. By leveraging these platforms, they can reach a wider audience and connect with potential customers who prefer online shopping, giving them a competitive edge over other businesses.
Gain a Competitive Advantage: Embracing the benefits of input credit, inter-state selling, and e-commerce registration provides SMEs with a distinct competitive advantage. They can optimize their operations, increase profitability, and enjoy greater market visibility, positioning themselves ahead of their competitors.
GST return filing is an indispensable process where registered taxpayers submit the details of their sales, purchases, and taxes paid to the government. It is compulsory for all GST-registered taxpayers in India, regardless of their sales or purchases during the filing period.
For filing a GST Return, you need to have GST compliant sales and purchase invoices attached.
This form records all your B2B and B2C sales, interstate and intrastate, along with reverse charge purchases and stock transfers during the tax period.
Make amendments to your GSTR-1 document to ensure accurate tax records with ease. From correcting mismatches to fixing any errors, file GSTR1A between 15 and 17 of the following month.
GSTR-2A is a monthly GST return for inward supplies. It provides taxpayers with a detailed list of final invoice-level purchase information for goods and services received during the tax period
The GSTN auto-generates a tax return for a taxpayer’s purchases and inward supplies based on the information from their suppliers’ GSTR-1.
The GST Council has emphasized that GSTR-2B is a tool that can aid in streamlining the return filing process by reducing the time required to file returns, minimizing the occurrence of errors, facilitating reconciliation, and simplifying compliance for taxpayers.
The GST return form consolidates monthly tax returns and includes important information such as the taxpayer’s basic information, period of return, turnover details, final aggregate-level inward and outward supply details, tax liability under CGST, SGST, IGST, and additional tax(+1% tax), ITC details, cash and liability ledgers, and information about other payments including interests, penalties, and fees.
It is a notice issued by the tax authority to taxpayers who have failed to file their monthly GST returns on time. It serves as a reminder to file their pending returns and avoid any penalties or late fees.
GSTR-3B is a temporary consolidated summary GST return that provides relaxation to businesses that have recently registered for GST. It includes details of inward and outward supplies, taxes paid, and input tax credit claimed. It is filed on a monthly basis by registered taxpayers until a regular return is implemented.
It is a quarterly GST return filed by compounding vendors. This form includes the total value of supplies made during the return period, along with details of the tax paid at the compounding rate (not more than 1% of aggregate turnover) for the period. Additionally, it includes invoice details for inward supplies if they are either imports or purchased from normal taxpayers.
The composition dealer’s quarterly tax return for purchases is filed using this form. It is an auto-generated document based on the information provided in the GSTR-1, GSTR-5, and GSTR-7 of the suppliers. It contains details of the taxpayer, period of return, and invoice-level purchase information separately for goods and services. Additionally, it includes information about the tax paid at the compounding rate, which cannot exceed 1% of the aggregate turnover, along with invoice details for inward supplies if they are either imports or purchased from normal taxpayers.
The tax return for non-resident foreign taxpayers is subject to variations, and it includes details of the taxpayer, return period, and invoice information for all goods and services sold, purchased, and imported by the taxpayer during the registered period/month.
This monthly GST return is specifically for Input Service Distributors (ISDs). It includes the taxpayer’s basic information (name, GSTIN, etc.), period of the return, and invoice-level supply details from the GSTR-1 of counterparties. Additionally, it contains invoice details, including the GSTIN of the taxpayer receiving the credit, a separate ISD ledger with the opening ITC balance for the period, credit for ITC services received, debit for ITC reversed or distributed, and closing balance.
This is the monthly GST return for Tax Deducted at Source (TDS) transactions. It includes the taxpayer’s basic information (name, GSTIN, etc.), the period to which the return pertains, the supplier’s GSTIN, and the invoices against which the tax has been deducted. The return is categorised under the major tax heads of SGST, CGST, and IGST, and it also includes details of any other payments, such as interests and penalties.
The e-commerce operator files this return monthly, which includes the taxpayer’s basic information (name, GSTIN, etc.), the return period, details of supplies made by registered and unregistered suppliers through the e-commerce portal to customers, the customers’ basic information (registered or unregistered), the amount of tax collected at source, tax payable, and tax paid.
It is an annual return that includes consolidated details of a taxpayer’s income and expenses. The information provided is regrouped according to the monthly GST returns filed by the taxpayer, providing a comprehensive overview of their GST transactions over the course of a year.
Every taxpayer enrolled in the composition scheme is required to file an annual return using this form.
It is an annual return form that e-commerce operators who collect tax at the source are required to file.
This is an audit form that taxpayers must file if their aggregate turnover exceeds ₹2 crores in a financial year and they are required to have their annual reports audited.
When terminating business activities permanently or cancelling GST registration, taxpayers are required to file their final GST returns before doing so. This return will include details of all supplies, liabilities, tax collected, and tax payable.
The aforementioned is a tax return filed by taxpayers who possess a UIN (Unique Identification Number). It comprises the specifics of purchases made by foreign embassies and diplomatic missions for their own use during a specified month.
GST Eliminates Cascading Effect – The introduction of GST has eliminated the cascading effect where tax on tax was paid for a single transaction, resulting in saving money for taxpayers.
Higher Threshold – The threshold for GST has been increased, with the limit for the sale of goods being aggregate turnover exceeding 40 lakhs, and aggregate turnover exceeding 20 lakhs for sale of services, thereby exempting small businesses below this limit from GST filing.
Easier for Startups and E-commerce Businesses – GST has made tax management easier for startups and e-commerce businesses by eliminating the different tax laws across different states.
More Organised System – The introduction of the GST tax return filing system has made the process more organised, with all taxes being paid online and the elimination of major hassles associated with tax filing.
It is crucial to complete the filing within the due date to file GST. This will help in avoiding late payment charges and interests. The due dates for filing GST returns can be extended as per the issuing order or through notifications. Vakilsearch has gathered a list of due dates to file GST for the financial year 2021- 2022 and 2022 – 2023.
Meeting the due dates for filing GST returns is essential to avoid late payment charges and interests.
But no worries! We have got your back here— with our expert team we would be there at every step to assist you with a compiled list of upcoming due dates for filing GST returns for the financial years ahead!
There are four GST types with different taxation rate, namely
Here are the steps to download the GST registration certificate:
Listed are the benefits of GST registration:
Yes, GST doesn’t discriminate, it covers everyone! Whether you’re a service provider, a manufacturer, or a trader, GST is a must! It even extends its loving arms to dealers, bloggers, writers, import-export businesses, startups of all shapes and sizes, and even those entities like LLPs, proprietorships, partnerships, and private limited companies. No one can escape the mighty grasp of GST!
GST registration usually takes between 5-7 working days.
Yes, but only if you’re operating in multiple states!
If a business spreads its wings across multiple states, it must spread its GST registrations too. Each state demands its own GST registration.
It’s a state-by-state affair, my friends!
Voluntary GST registration is available even if your annual turnover doesn’t exceed the threshold limit (40/60lakhs). By registering, you gain recognition as a legal entity and access various benefits, including issuing GST invoices and claiming input tax credits. Don’t miss out on these advantages – seize the opportunity to register for GST today.
Businesses engaged in the sale of goods must register as a normal taxable person if their turnover exceeds ₹40 lakhs (₹20 lakhs for north-eastern and hill states). Service providers, on the other hand, need to register if their turnover exceeds ₹20 lakhs (₹10 lakhs for north-eastern and hill states).
Some of the important documents required for GST registration are:
The composition scheme was introduced to ease the compliance burden for small taxpayers. It enables them to file quarterly returns instead of monthly returns. Taxpayers with an aggregate turnover below 1.5 crores are eligible to opt for this scheme.
After successfully completing the GST registration process, you will receive a GST registration certificate and a valid GSTIN. This enables you to claim input tax credit and start filing GST returns.
If you prefer, we can handle your GST filings, making the process easy and convenient, just like the registration process.
The E-Way Bill is an electronic waybill that a GST registered person needs to obtain for the movement of goods in a vehicle with a value exceeding ₹50,000. You can register for an E-Way Bill through the E-Way Bill Portal at https://ewaybillgst.gov.in/.
Maximum of 30 days from the date on which they become liable to register.
No. A person without GST registration cannot claim input tax credit for the GST paid by them or collect GST from their customers.
No, GST is not charged on exported goods and services. Since GST is a tax based on consumption, and in the case of exports, the goods/services are not consumed in India, they are not subject to taxation.
Yes, it is mandatory for e-commerce operators but the threshold limit doesn’t apply to them.
The new registration application form includes an online utility for selecting the HSN Code in the Goods and Services section. You can easily find the HSN Code by typing the product name or code in the search field. A dropdown menu will appear with relevant options, allowing you to select the appropriate chapter and product. The HSN Code will be automatically populated in the application. You can repeat this process for multiple goods if needed.
Yes, a PAN card is mandatory for GST registration. However, the TDS registration which is possible through TAN.
Under a single GST registration, it is possible to register multiple businesses, as long as they are located in the same state.
However, it is important to note that you cannot use two different trade names for these businesses under the same registration.
Taxpayers whose GST registrations have been cancelled are obligated to apply for a new registration. It is crucial for them to obtain a valid GST registration in order to maintain their business operations.
If your GST registration application is rejected, you will have an opportunity to respond to the rejection letter and address any issues. However, if you choose to submit a new application, you will need to wait for a final rejection, which typically takes around 10 days.
These are the three types of the GST used
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