What is GST Registration?
GST is the product of the biggest tax reform in India which has tremendously improved ease of doing business and increasing the taxpayer base in India by including millions of small businesses. Tax complexities would be reduced due to the abolishing and subsuming of multiple taxes into a single, simple system.
What is Eligiblity for Businesses are required to register for GST if they fall into one of the following criteria.
1. Aggregate turnover
Any service provider who provides a service value of more than Rs. 20 Lakhs aggregate in a year is required to obtain GST registration. In the special category states, this limit is Rs. 10 lakhs. Any entity engaged in the exclusive supply of goods whose aggregate turnover crosses Rs.40 lakhs is required to obtain GST registration.
2. Inter-state business
An entity shall register for GST if they supply goods inter state, i.e., from one state to another irrespective of their aggregate turnover. Inter state service providers need to obtain GST registration only if their annual turnover exceeds Rs. 20 lakhs. (In special category states, this limit is Rs. 10 lakhs).
3. E-commerce platform
Any individual supplying goods or services through an e-commerce platform shall apply for GST registration. The individual shall register irrespective of the turnover. Hence, sellers on Flipkart, Amazon and other e-commerce platforms must obtain registration to commence activity.
4. Casual taxable persons
Any individual undertaking supply of goods, services seasonally or intermittently through a temporary stall or shop must apply for GST. The individual shall apply irrespective of the annual aggregate turnover.
5. Voluntary registration
Any entity can obtain GST registration voluntarily. Earlier, any entity who obtained GST voluntarily could not surrender the registration for up to a year. However, after revisions, voluntary GST registration can be surrendered by the applicant at any time.
The types of GST registration varies depending on the kind of business undertaken and the supply location of goods or services.
1. Normal scheme
This category applies to taxpayers operating a business in India. Taxpayers registering under the normal scheme do not require a deposit and are also provided with unlimited validity date.
2. Non-resident taxable person
The category applies to individuals located outside of India. The taxpayers should supply goods or services to residents in India. The registration remains active for a period of 3 years.
3. Casual taxable person
Any taxpayer establishing a stall or a seasonal shop has to register under the casual taxable person scheme. To register as a casual taxable person, the taxpayer shall pay a deposit equal to the amount of GST liability. The registration remains active for a period of 3 months.
4. Composition scheme
An entity should enrol under the GST composition scheme to register as a composition taxpayer. Any taxpayer whose turnover is less than rs. 1.5 Crore can avail this facility. Entities enrolled under this scheme can pay a flat GST rate. However, they will not be allowed to claim input tax credit.