GST is India’s largest tax reform, which has greatly enhanced the ease of conducting business while also expanding the country’s taxpayer base by incorporating millions of small enterprises. Tax complexity would be minimized as a result of the elimination and consolidation of various taxes into a single, simple system.
The GST Act provides that every supplier of goods or services or both who has an aggregate turnover of more than Rs. 20 lakhs in a year (Rs.10 lakhs in Special Category States) have to obtain GST registration. If the supplier is only supplying goods, then threshold limit is Rs. 40 lakhs in a year (Rs.20 lakhs in Special Category States) subject to the condition that State has opted for this higher threshold limit. However, there are certain categories of suppliers who are required to obtain mandatory registration irrespective of their turnover limit.
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In new GST act it is mandatory to all companies involved in the purchase or sale of commodities, the provision of services, or both to register and acquire a GSTIN. Registration is required anytime a company exceeds a certain level of turnover or when a person begins a new business that is likely to exceed the prescribed threshold of turnover.
➤ Who is required to take mandatory GST Registration?
The following categories of suppliers are required to obtain mandatory registration irrespective of any turnover limit:
1. Persons making any inter-state taxable supply of goods (services have been exempted from this condition)
2. Casual taxable persons making taxable supply (However casual taxable persons making supplies of specified handicraft goods need not take compulsory registration and are entitled to the threshold exemption of Rs. 20 Lakh.)
3. Persons required to pay tax under reverse charge
4. Non-resident persons making taxable supply
5. Persons required to deduct tax under section 51
6. Persons required to collect tax under section 52
7. Persons who make taxable supply on behalf of other taxable persons whether as an agent or otherwise
8. Input Service Distributor
9. Person selling goods or services through e-commerce operator
10. Every E-Commerce operator who is required to collect tax at source
11. Person supplying online information, data base access or retrieval services (OIDAR) from a place outside India to an unregistered person in India
➤ Exemption from Registration
The following persons are not required to take GST Registration:
1. A person supplying only exempt goods or services, would not be required to obtain registration even if his aggregate turnover during the year exceeds Rs. 10/20 lakhs.
2. An agriculturist is not required to obtain registration to the extent of supply of produce out of cultivation land
➤ Types of GST Registration
The person shall be allowed to opt for the following two schemes while taking registration:
Composition Scheme
The Composition levy scheme is a very simple, hassle-free compliance. It is a voluntary and optional scheme. This scheme is for small taxpayers whose turnover is less than 1.5 crore in case of supplier of goods (75 lakhs in case of North Eastern States) and 50 lakhs in case of supplier of services. The following persons shall not be eligible to take composition scheme:
a) Manufacturer of ice cream, pan masala, or tobacco
b) Person making inter-state supplies
c) Casual taxable person or non-resident taxable person
d) Supplier supplying goods through an e-commerce operator
Regular Scheme
If a person who is not eligible or not willing to opt for composition scheme has to opt for regular scheme.
➤ Calculation of Aggregate Turnover
For the purpose of registration, where turnover limit applies, one has to calculate the aggregate turnover during the year. The Aggregate Turnover of the year shall be sum of following:
1. Value of all taxable supplies
2. Value of all exempt supplies
3. Value of export supplies
4. Value of inter-state supplies
5. Turnover of all entities of a person under same PAN(aggregated on an All India Basis).
Aggregate Turnover shall not include value of any inward supply on which tax is liable to be paid by a person on reverse charge basis. Turnover shall also not include GST paid on any supply.
➤ Voluntary Registration
If a person whose annual turnover is below the threshold limit or not liable to take mandatory registration may apply for GST registration voluntarily.
➤ DOCUMENTS REQUIRED FOR GST REGISTRATION
- Business Pan Card
- Identity Proof with Photo
- Address Proof
- Business Registration Document
- Business Location Proof
- Bank Account Details
