GST REGISTRATION

Launched on July 1 2017, the Goods & Services Tax (GST) applies to all Indian service providers (including freelancers), traders and manufacturers. A variety of Central taxes like Service Tax, Excise Duty, CST and state taxes like Entertainment Tax, Luxury Tax, Octroi, VAT are absorbed in one tax – GST, implemented on 01.07.2017. GST is to be charged at every step of the supply chain, with full set-off benefits available. The procedure for GST is entirely online and requires no manual intervention.

Every product goes through multiple stages along the supply chain, which includes the purchasing of raw materials, manufacturing, sale to the wholesaler, selling to the retailer and then the final sale to the consumer. Interestingly, GST will be levied on all of these 3 stages. Let’s say if a product is produced in West Bengal but is being consumed in Uttar Pradesh, the entire revenue will go to Uttar Pradesh.

Also, taxpayers with a turnover of less than Rs.1.5 crore can choose composition scheme to get rid of tedious GST formalities and pay GST at a fixed rate of turnover.

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?
Items that are considered basic necessities come under exempt list i.e. they are not taxed.
Household necessities and life-saving drugs etc. are taxed at 5%.
Products like computers and processed food are taxed at 12%.
Hair oil, toothpaste and soaps, capital goods, industrial intermediaries and services are taxed at 18%.
Luxury items are taxed at 28%. 

DOCUMENTS REQUIRED FOR GST REGISTRATION

The list of documents required for registration of GST for various business are as follows:

Proprietorship
1. PAN Card and address proof of proprietor

LLP
1. PAN Card of LLP
2. LLP Agreement
3. Partners’ names and address proof

Private Limited Company
1. Certificate of Incorporation
2. PAN Card of Company
3. Articles of Association, AOA
4. Memorandum of Association, MOA
5. Resolution signed by board members
6. Identity and address proof of directors
7. Digital Signature

The following can be shown as proof of address of a director:-
1. Passport
2. Voter Identity Card
3. Aadhar Card
4. Ration Card
5. Telephone or Electricity Bill
6. Driving License
7. 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.