The Goods and Services Tax is a value-added tax system applied to most goods and services sold for domestic consumption. It is an indirect tax, replacing various indirect taxes in India, such as value-added tax, excise duty, and service tax. Designed to be comprehensive, multi-stage, and destination-based, GST is imposed at each stage of the supply chain on the value added. This system levies taxes at every point of sale, with central GST and state GST applicable for intra-state transactions and integrated GST for inter-state transactions. The introduction of Goods and Service Tax in India aimed to simplify the tax structure, eliminate tax cascading, reduce compliance burdens, and establish a unified tax framework nationwide. Its introduction has notably enhanced tax compliance, reduced instances of tax evasion, broadened the tax base, and facilitated seamless input tax credit flow. As a result, GST has contributed to a more efficient and transparent indirect tax system in India. The GST in India is primarily governed by the Goods and Services Tax Act, enacted on March 29 2017, and which came into effect on July 1, 2017.
Types of GST Tax in India:
- Integrated Goods and Services Tax (IGST)
- State Goods and Services Tax (SGST)
- Central Goods and Services Tax (CGST)
- Union Territory Goods and Services Tax (UTGST)
GST Registration:
Under the Goods and Services Tax (GST) system, businesses with turnovers exceeding specific threshold limits of Rs. 40 lakhs, Rs. 20 lakhs, or Rs. 10 lakhs, as applicable, are required to register as regular taxable entities. This process is known as GST registration and is mandatory for certain businesses. Failure to register under GST while conducting business is considered an offence, resulting in severe penalties. Typically, GST registration is completed within 2–6 working days.
Eligibility criteria for GST registration:
Any service provider offering services worth more than Rs. 20 Lakhs within a year must obtain GST registration. An entity must register for GST if it supplies goods inter-state, i.e., from one state to another, irrespective of their aggregate turnover. Inter-state service providers only need GST registration if their annual turnover exceeds Rs. 20 lakhs or Rs. 10 lakhs in special category states.
Any individual selling goods or services through an e-commerce platform must register for GST, regardless of turnover.
Anyone running a temporary stall or shop selling goods or services must apply for GST.
The Goods and Services Tax Network portal provides specific instructions on registering for GST in India. They are:
- Visit the GST Portal: Go to the official GST Portal at www.gst.gov.in.
- Initiate Registration: Select ‘Services’ under the Services tab and click on ‘Registration’.
- New Registration: Click “New Registration” and proceed with the registration process.
- Fill in the details: Complete Form GST Reg-01 with the taxpayer’s contact details, place of establishment, and Permanent Account Number (PAN).
- Submit Documents:Provide evidence of the taxpayer’s status, such as the Memorandum of Association, Certificate of Incorporation, and a list of signatories for the business.
- Online Application: Submit the registration application via the Goods and Services Tax Network portal.
- Verification and Approval: Valid registrations should be granted within 3 working days of the application, and applications may be backdated by 30 days.
- 8. Complete Part B: Fill in all the details in Part B of the application, including business details, trade name, business constitution, and district.
- Choose Registration Type: Based on the business activities, select the registration type, such as Normal Taxpayer, Composition Taxpayer, Casual Taxable Person, or Non-Resident Taxable Person.
- Upload Documents: Upload the necessary documents according to the checklist provided, including proof of business constitution, proof of principal place of business, and details of bank accounts.
AUTHOR:
Eshwar S, 5th year B.A, LL. B(Hons.), Veltech School of Law, Chennai.