GOODS AND SERVICES TAX
On July 1st, 2017, India moved to a new tax system – one that aims at converting the entire nation into a single market. If you are new to GST and keen to know how this new tax will affect you and your business, this section will help you understand the basics of the ‘Good and Simple Tax’.
Goods and Services Tax is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax levied on every value addition. GST is a single domestic indirect tax law for the entire country.
Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. All the inter-state sales are chargeable to the Integrated GST.
PERSONS LIABLE FOR REGISTRATION UNDER GST
As per sec 22 of the CGST/SGST Act 2017, every supplier who makes a taxable supply i.e supply of goods and/ or services which are leviable to tax under GST law, and his aggregate turnover in a financial year exceeds the threshold limit of twenty lakh rupees shall be liable to register himself in the state or the union territory of Delhi or Puducherry from where he makes the taxable supply.
Sec 24 of the CGST act mention certain categories of suppliers, who shall be liable to take GST registration even if their aggregate turnover is below the said threshold limit of 40 lakh rupees.
In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.
For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.
CBIC has notified the increase in threshold turnover from Rs 20 lakhs to Rs 40 lakhs. The notification has come into effect from 1st April 2019.
WHO SHOULD REGISTER FOR GST ?
Individuals registered under the Pre-GST law. (i.e., Excise, VAT, Service Tax etc.)
Businesses with turnover above the threshold limit of Rs. 40 Lakhs* (Rs. 10 Lakhs for North-Eastern States, MJ&K, Himachal Pradesh and Uttarakhand) Casual taxable person / Non-Resident taxable person
· Agents of a supplier & Input service distributor
· Those paying tax under the reverse charge mechanism
· Person who supplies via e-commerce aggregator
· Every e-commerce aggregator
· Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person.
PERSONS NOT LIABLE FOR REGISTRATION UNDER GST ?
· Person supplying exempted goods or services which are not liable for tax under GST.
· An agriculturist to the extent of supply of produce out of cultivation of land. The following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit
· Persons making any interstate taxable supply
· Casual taxable persons
· Persons who are required to pay tax under reverse charge
· Casual taxable persons
· Every Electronic commerce operators
· Non-resident taxable persons
· Input service distributor
· Supplier of online information
· Deductor of tax at source.
EFFECTIVE DATE OF REGISTRATION UNDER GST ?
Where the application for registration has been submitted within 30 days from the date on which the person becomes liable to GST registration, the effective date of GST registration shall be the date on which he became liable for GST registration.
Where an application for GST registration has been submitted by the applicant after 30 days from the date of his becoming liable to GST registration, the effective date of GST registration shall be the grant of GST registration.
In case of a person taking GST registration voluntarily while being within the threshold exemption limit for paying tax, the effective date of registration shall be the date of order of registration.