In terms of the structure of indirect taxes in India prior to 2017, the year 2017 was revolutionary. Following the passage of the Goods and Service Tax Act by Parliament in March, the GST was implemented in the Indian economy this year. This event signified the end of any other indirect taxes imposed across the country under a single consistent statute.
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It caused considerable confusion at first, and because it was so new, individuals were unable to adapt quickly. However, as time went on, people discovered how valuable it was in avoiding various tariffs from being imposed at various points throughout the supply chain. People have become accustomed to paying GST online after three years.
Types of GST
Before we go into the various GST registration methods, let’s have a look at the four different forms of GST and their significance:
- CGST : The CGST (Central Goods and Services Tax) is a tax levied by the federal government on interstate sales of goods and services. This tax is universal and replaces all existing Center-imposed taxes such as the CST, SAD, and so on.
- SGST : The SGST, or State Goods and Services Tax, is imposed by each state’s government. This tax has superseded all other state-imposed taxes such as the Entertainment Tax, Entry Tax, VAT, and others. The revenue generated by the SGST is solely owned by the state.
- IGST : This is when a levy is imposed on the exchange of goods and services between two states. The Integrated Goods and Services Tax (IGST) is charged when goods or services are carried from one state to another.
- UTGST : Only the five Indian Union Territories are subject to this tax. It serves the same goal and offers the same benefits as the SGST.
GST Registration: Different Processes & Benefits
In any event, regardless of annual revenue, every business that provides specific services must register for GST online. Furthermore, any business with a revenue of Rs. 20 lakh (Rs. 40 lakh or Rs. 10 lakh in special category states) is required to register under the GST law. A normal taxpayer, on the other hand, is required to register for GST under Section 24 of the CGST Act 2017, regardless of his annual income.
Regular GST Scheme
The usual kind of GST registration entails a legalized taxpayer being obligated to collect a particular amount of tax from purchasers of goods and services, which will be paid to the government once the amount paid as GST on the input value of goods and services has been adjusted. Under conventional GST registration, GST is paid instantly, which means the customer must pay it at the time of purchase and it must be collected from the client at the time of sale.
It’s also worth noting that everyone who is subject to the regular plan is required to file GST returns and pay the collected tax on a monthly basis. This plan also has the benefit of allowing the scheme holder to sell his items outside of his state’s borders, and clients from other states can buy them without limitation.
GST Registration Benefits Under The Composition Scheme
There are a few things to consider before registering for the GST composition scheme. Only enterprises with annual revenues of less than Rs 1.5 crore are eligible. As useful as this programme is, especially for SMEs, there are a few elements that distinguish it from the conventional GST Registration system:
- The Composition Scheme is beneficial for intra-state transfers of goods and services. The vendors who operate within a state will be in a better position. Dealers whose job involves interstate transactions, on the other hand, must choose the standard scheme.
- If a taxpayer wants to engage in this programme, he must do so voluntarily. However, if his annual income exceeds Rs 1.5 crore or Rs 75 lacs after registration, he would be immediately switched to the regular plan, as he will no longer be eligible for the composition one.
- Only the taxable commodities are subject to GST under the composition scheme. Even for banned items, payment of Composite GST was required prior to January 1, 2018.
- The authorities have the authority to prosecute anyone who knowingly provides false information to register under this scheme. Because the goal of this method is to improve the state of small businesses, no foul behavior is tolerated.
- In this scenario, taxpayers are not needed to furnish any invoices. Instead, they must simply produce their supply bill to the authorities.
The Benefits of GST Registration
With all of the above in mind, it’s easy to say that becoming a GST payer comes with a slew of benefits and advantages. Here are some of the reasons why GST registration is advantageous:
- It is a type of legal proof that recognises a person as a licensed provider of goods and services.
- Individuals are automatically eligible for all additional benefits and benefits offered by the GST law.
- The individual gets the legal right to collect tax from his customers or suppliers and credit the taxes paid to them.
- It is a uniform tax on goods and services that is applied across the country, making the entire indirect tax structure more understandable.