Goods & Service Tax (launched on 1st July 2017) applies to all goods and services and it 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. Tax complexities would be reduced due to the abolishing and subsuming of multiple taxes into a single, simple system.
The new GST regime mandates that all entities involved in buying or selling goods or providing services or both are required to register and obtain GSTIN. Registration is mandatory once the entity crosses a minimum threshold turnover or when an individual starts a new business that is expected to cross the prescribed turnover.
Any person would be required to register on GST if the aggregate annual turnover of exclusive goods he supplies exceeds ₹40 lakhs during any financial year. ₹20 Lakhs in the case of supplier supply goods and service or service only. However, for special category states (northeastern and hilly states), this threshold limit will be applicable on ₹20 lakhs in case of goods and ₹10 lakhs.
For calculating the Aggregate turnover of any taxpayer, such aggregate turnover includes the value of all taxable supplies, exempt supplies, exports, and inter-state supplies. But excludes any inward supplies on which the recipient is liable to pay tax on a reverse charge basis. Aggregate turnover includes supplies made by him on behalf of his principals.
But it excludes the value of job-worked goods, in case the candidate is a job worker and the amount of GST or cess etc. The purpose of computing the aggregate turnover of a person for determining his eligibility to pay tax under GST is from the 1st day of April of any financial year up to the date when he becomes liable for registration under this act.
Example: Mr. Kapil, who has started a business for the supply of goods and services in Delhi, furnishes the following information pertaining to the period ended on 31-03-2022:
Since Mr. Kapil’s aggregate turnover is ₹21,70,000, hence his aggregate turnover exceeds the threshold limit of ₹20 Lakhs, Mr. Kapil is compulsorily liable to be registered under GST.
Mandatory GST Registration
Suppliers of goods or services have to be mandatorily registered under GST if they are engaged in making supply as:
Benefits of GST Registration
Registration in GST
The registration in GST is PAN-based and State specific. Any supplier who makes a taxable supply is required to obtain separate registration for each state in which the supply is made. A person who wants to apply for GST registration may apply in the state where the primary place of business is located.
Anyone who is mandatorily liable to be registered under GST must apply within 30 days from the date when he became liable for registration. After logging into the GST portal, a person who wants to register in GST follows some registration steps to complete the registration process.
After applying for GST registration, the applicant receives a certificate of registration from the department within 30 days of the date of application, and after getting registered under GST supplier can then charge GST on all of its invoices and collect it from the customer and pay to the department in the form of GST return.
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