Goods and Services Tax – INTRODUCTION 

The full form of GST is Goods and services tax. It is a single rate of indirect taxation to apply in the country. It includes all the central and state taxes charged presently in the country into one single tax rate. In India, the GST Bill existed in 2014 through The Constitution 122nd Amendment Bill. 

Under the GST regime, “One Nation, One Tax” is introduced, aiming to simplify taxation procedures and eliminate cascading effects. GST eliminates the issue of tax on tax by allowing tax credits on input taxes paid, thereby resulting in a more efficient and transparent tax system.

TYPES OF GST

There are four types of GST:

1. Integrated Goods and Services Tax (IGST)
2. State Goods and Services Tax (SGST)
3. Central Goods and Services Tax (CGST)
4. Union Territory Goods and Services Tax (UTGST)

The government has fixed different taxation rates under each type, which will apply to the payment of tax for goods and services rendered.

GST rates in India for various goods and services are classified into four slabs: 5%,12%, 18%, and 28% GST. GST Council decides the GST slabs.

FEATURES OF GST

Given below are the key elements of GST:

• The Union Government will have all the powers to make the rules and regulations states. 
• GST will include current Central and state-level taxes in itself. 
• GST is away from alcohol for human consumption.
• GST Council comprises Central and state ministers and will administer the GST in India.

IMPACT OF GST ON VARIOUS BUSINESSES

GST is the one tax for the Central and states that will give rise to transparency in the nation’s functioning. The impact of GST on various industries is:

• Real estate-GST will result in fewer malicious acts in this sector and industry related to real estate—a reduction of Tax evasion as a consequence. GST, being one tax, will solve the problem of collecting VAT on excise duty. GST also has a negative impact by increasing the cost for consumers.

• Tourism and hospitality- GST will replace all the multiple taxes the center and state levied. GST may change the input credit accessibility for services used to rebuild and construct the hotels and resorts. GST will likely simplify the procedures. 

• Education- The education sector enjoys many exemptions and benefits of GST. It is also the segment of the negative list of services, excluding the industry from the service tax ambit. However, there should be no taxes on education for real benefits to this sector.
• Financial Services– GST may increase the cost of banking and financial services. Presently, the percentage of the tax rate is 15% on service tax, with the assumed GST tax rate of 18% to 20%, which is expensive. The banking sector recommends that GST should not cover financial and banking services.

GST REGISTRATION

GST replaced indirect taxes such as Central Excise Duty, Service Tax, Value Added Tax, etc., under a single tax. GST implementation aims to streamline the taxation system, eliminate cascading effects, and create a unified national market.

GST registration is how businesses obtain a distinctive GSTIN from the tax authorities. It serves as evidence of registration under GST and is required to collect and remit GST on taxable supplies. Registration of GST depends on factors like turnover, business type, and location.

How to apply for GST Registration?

Here’s a step-by-step guide on how to register for GST:

• Step 1- Visit the GST portal (www.gst.gov.in) and navigate the ‘Services’ section.

• Step 2- Click ‘New Registration’ and select ‘New Registration’ again on the following page.

• Step 3- Fill in the required details, including PAN (Permanent Account Number), email address, and mobile number.

• Step 4- Complete the confirmation process by entering the OTP received.

• Step 5- Proceed to fill in the registration application with business-related details, such as business name, address, and bank account information.

• Step 6- Upload the crucial documents, such as identity proof PAN.

• Step 7– You will receive an Application Reference Number (ARN) after applying. Use this number to track the status of your application.

CONDITIONS UNDER WHICH GST REGISTRATION BECOMES MANDATORY

• For businesses within most states, if their annual turnover exceeds ₹40 lakhs, then GST registration becomes mandatory. (₹10 lakhs for certain States)

• Businesses that operate within most states must register for GST if their annual turnover exceeds ₹40 lakhs (₹10 lakhs for certain States). 

• In the case of businesses dealing with interstate supplies, GST registration is mandatory regardless of turnover.

• When a business wants to claim the input tax credit on its purchase, then GST registration becomes mandatory.

GST EXEMPTION 

GST exemptions are specific goods or services that are exempt from the application of GST. These exemptions change from time to time and vary from country to country. The government can grant exemptions for various reasons, like alleviating the tax burden on essential goods and services or supporting specific sectors.

Here is a list of some of the most common goods which are GST-exempt:

• Vegetables
• Fruits
• Dry fruits
• Live animals
• Meat, etc. 

CONCLUSION

In conclusion, understanding the requirements and implications of GST registration is crucial for small businesses operating in India. Small business owners must evaluate their specific circumstances, accounting for their turnover, the nature of their business, and the advantages of GST registration, to make an informed decision regarding GST compliance. 

With the assistance of Eazybills, you can easily make GST online payments. For the latest updates, news blogs, and articles on GST-related terms. You can connect with Eazybills for income tax accounting, GST tax, and salary.