This article explains the basics of GST Registration and whether you should get your business registered or not?
The Government of India implemented GST on 1st July 2017 and many entrepreneurs are confused whether to get their business registered with GST or not? We take this opportunity to share the practical aspects of GST India and how it affects businesses and entrepreneurs.
For many businesses like milk, raw vegetables and other items, GST is exempt, thus there is no requirement for GST Registration. For all other businesses, GST registration is required if the turnover threshold limit is about to cross 20 lakhs depending upon the type of business. For North East Indian states and Sikkim, the turnover exemption limit is Rs. 10 Lakhs.
GST Registration is compulsory for every supplier if their turnover crosses Rs. 20 Lakhs. However, certain types of business require to be compulsorily registered for GST even if their turnover is less than 20 lakhs. These businesses are as follows:
- Persons making any Inter-State taxable supply (e.g. from Maharashtra to Karnataka)
- Casual Taxable person (Does not have any fixed place where GST is applicable)
- Non-resident Taxable person (No fixed place of operations in India)
- Persons who are required to pay tax under Reverse Charge
- Persons who are required to deduct tax at source (TDS)
- Agents of a supplier registered with GST
- Input Service Distributors
- Persons who supply goods or services through E-commerce Operator (Alibaba, Paytm, etc)
- Every E-commerce Operator (e.g. Flipkart, Amazon)
- An aggregator who supplies services under his brand name (online marketplace)
- Any Specialized Agency of the UN or any Multilateral Financial Institution
Any business or individual sole proprietor having total turnover not exceeding Rs. 75 Lakhs (Rs. 50 Lakhs for North Eastern States) shall be eligible to pay tax by composition scheme. This is a good scheme for some businesses as the GST Rate is only 5%
It is important to note that no permission shall be granted to a taxable person or business under Composition Scheme under certain conditions listed below:
- Business or trader who is engaged in the supply of services (except services of restaurants); or
- Business or person who makes any supply of goods which are not leviable to tax under this Act or who makes any inter-state outward supply of goods
- Business which makes any supply of goods through an e-commerce company or portal who is required to collect tax at source (TCS)
- Business which is a manufacturer of such specific goods as may be notified
GST is a reality in 2018 across India. Daily thousands and lakhs of businesses are going for GST Registration. Businesses and traders, especially businessmen and businesswomen cannot avoid GST. They have to spend time and energy to master GST since it impacts all of us across India. Thus, it is important to understand which category your business falls into. This will help you to determine whether GST registration is required for your business or not? FinanceBazaar.com has a team of GST experts ready to help you with your GST compliance. For any help or FREE advice on GST related matters, you can contact our Chartered Accountants by visiting FinanceBazaar.com