Overview of GST Registration
According to the GST Regimes, businesses whose turnover gets over Rs. 40 lakhs* (Rs 10 lakhs for North Eastern – All hilly states) is obliged to register as a “normal taxable person”. This overall registration procedure is called GST registration, and for certain businesses, registration under GST is compulsory. You must note that it will be an offence under GST and heavy penalties will apply if the organization carries on business without registering under GST. It takes 2-6 working days to get the GST registration done. Carrying out business without GST registration is considered as an offence under GST Law.
What is GST (Goods and Service Tax)?
GST is the biggest tax reform in India levied on the goods and services which subsumes both the State (VAT, Entertainment Tax, Luxury Tax, Octroi) and Central taxes (CST, Service Tax, Excise Duty). This will help the end consumer like us to bear only GST charged by the last dealer in the supply chain. After all, One Nation One tax is the slogan of our PM Sri Narendra Modi.
NOTE: In order to give relaxation to the taxpayers, the CBIC (Central Board of Indirect Taxes and Customs) on 1 April, 2017 introduced two threshold limits for exemption from registration. If the aggregate turnover of a Business increases more than INR 40 Lakh, then that business is required to have the GST Registration. There is an exemption for the North Eastern states and other states which include Jammu and Kashmir, Himachal Pradesh and Uttarakhand. The limit for these states is INR 20 Lakh which was INR 10 Lakh earlier.
GST Registration is mandatory for businesses whose turnover fall under the criteria mentioned above. In case such business organizations carry on business without registering under GST, it will be considered a punishable offence and will be liable to pay heavy fine penalties. Here at CorpBiz, GST registration of your firm is totally online and convenient.
When the Customers, shoppers, or consumers pay the GST, it transmitted to the government by the organizations selling the goods and services. As a result, GST gives revenue to the Govt. The GST is comprised in the final price of all the goods/services before its purchase. This tax eliminates all the indirect taxes that have been obligatory by the central government and the state government beforehand in India. The businesses require going for GST registration to be applicable for this.
What is a GST Return?
The GST Return is a document containing details of income that is mandatory to be filed with the tax authorities as per the law. A taxpayer must submit two returns on a monthly basis Under the GST law and one such return annually. You must note that there is no provision for revising the returns and all returns have to be filed online. Moreover, all invoices for the previous tax period that went unnoticed - must be included in the current month itself. A registered dealer has to file GST returns Under GST, which include: Sales, Purchases, Input tax credit (GST paid on purchases) and Output, GST (On sales).
What is GSTIN (Goods and Services Tax Identification Number)?
The GSTIN is a “unique identification number” given to each and every GST taxpayer. A person who has a GST number can log onto the “GST portal” to verify a GSTIN number.
What is the GSTN (Goods and Service Tax Network)?
The GSTN or Goods and Service Tax Network, is generally occupied by the section 8 (non-profit), non-government, private limited company. Moreover, GSTN is a one-stop solution for all your requirements for indirect tax. GSTN is accountable for maintaining an Indirect Taxation platform for GST to prepare, file, set all the returns, and make payments of your accountabilities for indirect tax liabilities.
What do you mean by GST Return Filing?
A GST Return Filing is a return document for the taxpayers that contains details of their income, which is needed to be filed with the GST administrative authority of India. The GST Return Filing document is used by the tax authorities to determine and calculate the tax liability of a GST taxpayer which includes the following details.
- Output GST (On sales)
- Input tax credit (GST paid on purchases)
What is the Reason behind Implementation of GST in India?
In order to improve the way of collecting the tax, the Goods and Services Tax (GST) was implemented in India. Moreover, the main reason for implementing the GST in India is to reduce the tax burden that comes with both companies and consumers. There were numerous taxes included at each phase of the production network with the previous tax system, without mentioning that tax has been paid at earlier stages. Consequently, the end cost of the item doesn't obviously show the item's genuine price and how much tax was made upon. It is noteworthy that this cascading structure is excessively unbelievable and unproductive, which sometimes garnered a lot of confusion and repeatedly led to double taxation.
It was a very successful and wise step of the government to incorporate whole India at one nodal point through the uniform taxation system instrument in the form of GST (Goods and Service Tax). It shoots up considerably by removing the lengthy list of taxes in terms of the Indian economy that were levied by the state as well as central government beforehand.
What are the Eligibility Criteria to Register for GST?
The following entities must go for do GST registration in India:-
- Persons/businesses making the inter-state supply of goods & services
- Individuals/businesses registered under tax services of the previous regime All e-Commerce aggregators
- E-commerce aggregator
- Non-Resident taxable person/Casual taxable person
- Agents of a supplier & Input service distributor
- Supplies online information, database access and/or retrieval services from Foreign Notified by the Central/State Govt./GST Council
What are the Benefits of GST registration?
- The implementation of GST has detached the cascading effect of taxes and removed the ‘taxes on tax’. This has abridged the cost of production significantly for businesses and the effects of Double Taxation
- GST registration works in favor of growth of the revenue generation forecasts for the Government.
- The GST laws and regulations have been able to regulate the unorganized and scattered business sector. Moreover, a GST registration makes a business lawfully recognized with valid authorization as a supplier of goods or services
- GST registration enables a business legally certified to collect tax from its recipients or purchasers and pass on the credit adjacent to their taxes.
- GST lends a helping hand to business to consolidate its warehousing facilities and get better with logistics' efficiency in a reduced cost.
- With the help of GST Registration, the small businesses can utilize the composition scheme to make available by the GST regime to lower the level of taxes. In that way, they can reduce their compliance and taxation burden significantly.
- It is noteworthy that GST has been an advantage to the MSME sectors. Due to the simplified return filing system in the GST rules and regulations, MSMEs are less dependent on tax professionals in terms of the previous tax regime.
Modes of GST Registration in India: Transformation in India
GST is an indirect tax imposed in India that came into effect from July 1, 2017 to remove the geographical barriers and create a single market that is open to all to buy, sell, import, and export within our country.
Implementation of GST Registration will remove the cascading tax system such as CGST (Central Goods and Services tax) and SGST (State Goods and Services tax), eventually helping the end-consumer.
- CGST (Central Goods and Services tax)
CGST is the tax imposed on the Intra State supplies of goods and services by the Central Government. Intra-state supply of goods or services occurs when the location of the supplier and the buyer location are in the same state. In this GST Registration mode, a seller has to collect both CGST and SGST in which CGST gets deposited with Central government while the SGST gets deposited with State government.
- SGST (State Goods and Services Tax)
SGST is the tax imposed on the Intra State supplies of goods and services by the State Government. Here the tax imposed goes to the state government.
For example: A dealer in Noida sold goods to another seller in Ghaziabad worth INR 50000. A single tax GST will be imposed on the goods which will comprise of both CGST and SGST. The GST rate will be under 18% GST Slab in which both the CGST and SGST will be 9%. The dealer will have to pay INR 9000 in total in which 4500 will go to the Central Government and INR 4500 will go to the state government i.e the UP government.
- IGST (Integrated Goods and Services Tax)
IGST is the tax imposed on the inter-state supplies of goods and services which will be governed by the IGST Act. Inter-state supply of goods takes place when the location of the supplier and the place of supply are in different states. In IGST, the seller has to collect IGST from the buyer. The tax collected will be shared between the Central and State Government.
For Example: A businessman from Kerala sold goods worth INR 5, 00,000 to another businessman residing in Karnataka. The GST rate is 18% that means the businessman has to charge INR 90,000 as IGST. This amount will go the Central Government.
- UTGST (Union Territory Goods and Service Tax)
UTGST: Union Territory Goods and Service Tax is the full form of the UTGST. Union Territory Goods and Service Tax is only applicable when any services and goods are consumed in the given five regions of India, which includes Dadra & Nagar Haveli, Andaman and Nicobar Islands, Lakshadweep, Chandigarh, and Daman & Diu -called as Union territories (UTs) of India. In this sort of revenue is collected by the government of union territory. Union Territory Goods and Service Tax are levied with the CGST only, which are implied on the businesses only after the registration of GST.
Documents for Online GST Registration in India
The Documents required for the GST Registration varies with the business type. The list of documents is listed below:
The following details of the owner are required for a sole proprietorship.
- Address Proof
- PAN Card
- Aadhar Card
- Bank Account Details
- Passport Size Photograph
The following documents are required For a Public or Private Limited Company:-
- Company’s PAN Card
- The Certificate of Incorporation authorized by the MCA - Ministry of Corporate Affairs
- Authorised signatory’s PAN and Aadhar details. (Person must be citizen of India)
- Passport sized photo of the authorized signatory
- Address Proof of all Directors
- Passport sized photo of all the directors
- Memorandum of Association (MOA) and Article of Association
- Bank Account details
- Pan card of all Directors of the company
- Address proof of the business place (Operational)
The following are required documents for a Partnership Firm:-
- Details of all partners and the authorized signatory (PAN, Address Proof, Passport sized photograph)
- Copy of the partnership deed
- Registration Certificate/ Board resolution in case of LLP firms
- Business Address Proof
- Bank Account Details
The requirements for the documents are as follows for a HUF:-
- PAN Card of HUF
- Photograph of the owner
- PAN and Aadhar of Karta
- Address proof for the place of business
What is the Structure of 5 slabs under GST?
GST regimes were made by considering all the layman and inflation rates in mind. To make it simpler and easier, the GST was structured following the four tiers structure. These four zones are given below, which are as follows:-.
- Zero rates:
0% Zero rate tax means the - nil tax that is applied to the goods and/or services.
- Lower rate:
Lower tax rate determines the 5% tax rate which is applied to the CPI (Consumer Price Index) basket & mass consumption.
- Standard rate:
Standard rate includes 12% & 18% of the tax rates. Moreover, the council has finalized two standard rates to maintain the check on the rates of inflation.
- Higher rates:
Higher rates tax includes 28% of the tax rate under GST Regulation.
GST Tax Rate under Different Tax Rate Slabs
What is The GST Registration Process in India?
To successfully finish the registration process every taxpayer must also make sure to have a login ID and Password. It is also to download the registration certificate and to check the status of the registration application.
Procedure to Get Online Registration of GST
The Steps for GST Registration are as follows:-
- Step 1
You need to visit GST website and set up your username and password in the portal. You need to insert all the login credentials to be created through “Provisional ID” and the password received from the VAT department of India.
- Step 2
You need to click the link to the GST website, and click on to the ‘New User Login’. After that, click to accept the window on the displayed declaration form & then press ‘Continue’ to register yourself.
- Step 3
After that the ‘Login’ window will be displayed once you have accepted the declaration page. Get the ‘Provisional ID’ provided by the tax department via mail, SMS, or any other communication to login ID. Along with it, you need to Clear the ‘Captcha’ and click ‘Login’ to head with the procedure.
- Step 4
After that, you will be directed to the next step for the verification of credentials. Here, you have to enter the valid email id and mobile number for registration in the portal.
As important information, One Time Password (OTP) and other important messages will be sent to this ID and number, all the details have to be entered correctly, and then click the ‘Continue’. The OTP will be directed to your email ID & mobile number, as both the ID will be required for verification procedure. In addition, you need to keep in mind that the email ID and mobile number entered are permanent by nature. They will be registered in the records for any future communication. You should note that all the Amendment will be an online procedure. It means that any change in the phone number and email id would necessitate filing an Application for amendment GST registration.
- Step 5
The personal details have to be filled in once the OTP is verified to secure the login. Therefore, we advise to change the password to secure login gateway. A series of five security questions have to be answered when the password is set, before hitting ‘Submit.
- Step 6
After that, your personalized ‘Dashboard’ will be displayed after log in. To get the enrollment application form you need to click on ‘Provisional ID Enrollment’.
- Step 7
You need to fill in all the business details including the following details/particulars
• All Business details
• Details of Partners or Promoters
• Insertion of authorized signatory
• Principal place of Business
• Additional place of business
• List of Goods and services
• Details of Bank accounts
- Step 8
Moreover, some information is auto-populated via the VAT system, in which few are editable and few cannot be modified.
• Business Legal Name according to the Current Tax Act and PAN
• PAN – No. of businesses
• The State in which the business is Incorporated/registered
• Details of the Ward Number/Circle/Sector
The following Information can be Modified:-
• Name of Trade
• Registration Number
• Constitution of Business
• Document uploads section.
• Date of Registration of business
You need to save the details and click the ‘Continue’ after completion of it.
- Step 9
After that, you will be directed towards the next page of enrolment seeking the details of the partners or promoters of the business. Enter the obligatory information requested for and then click ‘Save and continue’ to proceed the procedure.
The ‘Authorized signatory’ tab has to be selected to fill in the details in the matter of business or the names entered in the promoters or partners section.
- Step 10
After that, on the option of ‘Principal Place of Business’, you need to enter the relevant details and click ‘Continue’. For your reference, do not forget to click ‘Save’ to make sure that no information has been lost while proceeding.
- Step 11
You need to enter the ‘HSN’ code of the goods handled under your business under the ‘Goods and services’ option bar. You simply need to enter the name of the goods under ‘Search HSN code’ if you do not know the code and obtain the same. After that, you need to hit “Save and continue”.
The similar procedure need to be followed applicable to the services also. You need to enter the “SAC code” of the services provided in pursuant to obtain the same. After that, click on ‘Continue’ to the next step of the enrollment form.
- Step 12
In the next step, the procedure would be to feed the bank details like type of bank account, bank account number, and IFSC code of the same. You should note that all the supporting documents have to be submitted in soft copies while proceeding. Therefore, it is better to get hold of the soft copies beforehand.
- Step 13
In the final point, all the documents must be verified and duly signed with the Digital Signature Certificate provided to you. A message on ‘Successful Submission’ shall be displayed within 15 minutes being an acknowledgement. Moreover, an ARN or application receipt number shall be sent via email for further queries concerning the enrollment form.
How to Download the GST registration Certificate Online?
1. You need to visit the GST common portal –“https://www.gst.gov.in/”
2. After that, you need to Log in to your GST account utilizing the username and password created by you while registering your name for GST Registration in the GST Portal. Along with, you need to enter the captcha correctly and select the login button afterwards.
3. A new page will open once the login is successful. After that, click on the “Services” option and select “User services” from the drop-box. You need to choose the “View/Download Certificates” in the options displayed in the picture.
4. You must note that the Registration certificate will automatically start downloading, when you select the download option while proceedings.
5. The Registration certificate shall be downloaded to your device and can be accessible to view the same when required. You need to take a print out this downloaded certificate and accordingly must display prominently in the place of your business.
What is the validity of GST Registration Certificate?
The validity of any GST registration certificate depends and conditional to the type of taxpayer who is receiving the certification. It is valid throughout when the certificate is issued to a regular taxpayer. In such cases, it only invalidates if it is canceled by the GST authority or surrendered by the taxpayer himself.
Though, the validity is restricted to a period of 90 days from the date of registration or for the period specified in the registration application, whichever is earlier in cases certificates issued for the casual taxpayer or Non-Resident Indian (NRI) taxpayer. Moreover, the validity period can also be extended under the provisions of Section 27(1) of the GST Act by the appropriate authorities.
Constituents of GST Certificate
- Registration Number
- Legal name
- Trade name
- Constitution of business
- Date of liability
- Period of validity
- Types of taxpayers
What is the Procedure to Make GST Online Payment?
Procedure to Make GST Online Payment is an easy process. Thereby, the following steps will take you through the online GST payment mode. Those are as follows:-
- Log in to GST portal
- Enter the - user name, then password, and then CAPTCHA.
- Visit Services tab, here you need to select Payment. After that -create Challan
- Select the mode of payment, and the amount.
- A summary of Challan will appear; once you have selected the payment mode. There you have the option of choosing the offline or online mode of payment
- You will have to visit the bank In case of offline payment. However, you can also make GST online pay via RTGS, NEFT, or credit or the debit card of authorized banks
- Finally, you will receive the receipt via e-mail and SMS Once you have made the GST payment online
How to Track GST Registration Application?
By following method, you can track your GST Registration application
- Firstly, log on to http://gst.gov.in
- Now click on the ‘service’ option available
- After clicking on the service option, a dropdown will provide a result of 'registration.'
- Now choose the ‘track application status’ option
- After choosing the option, you have to enter your ARN in a new window and click on search
- Here, you can see your application status and the same information will be shared on your registered mobile number and email ID.
Another mode to check application status;
- Firstly, log on to http://gst.gov.inwith the help of credential provided to you
- After selecting the Service tab for a drop-down, select option, 'registration.'
- Now click on the option, 'track application status' and after entering the ARN number, click on search.
What are the Late Fees and Interest on GST Return?
The Late fees and Interest forms significant components of the GST payment which gets incurred by business in case of postponement/delay in submitting or filing GST returns along with its fees. You must note that the GST law has clearly defined descriptions of offenses a well as penalties levied in each circumstance. This is important information for all CAs, business owners, and Tax Professionals as an unintentional mistake can cause severe penalty. Therefore, GST has brought in strict provisions for offenders to prevent tax evasion and corruption, regarding prosecution, penalties, and arrest.
Offences & Penalties
There are 21 offenses recognized under the GST. However, we have mentioned a few major offenses below for your understanding. Please consult our experts on offenses for the entire list of 21 offenses which differs from case to case basis.
The offenses recognized under the GST are as follows:-
- Not registering under GST when eligible and required by law
- Supply of any services/goods issuing a false invoice or without any invoice
- Issuance of invoices by a taxable person by means of the GSTIN of another bona fide taxpayer under GST
- Compliances and submission of false information while registering under the law of GST
- Submission of fake financial documents/records or files, or fake returns to avoid tax
- Obtaining Fraudulent Refunds
- Intentional suppression of sales to avoid tax
- Choosing for composition scheme even though a taxpayer is not entitled
A penalty will have to be paid under GST if in case any of the offenses are committed. The principles are also mentioned by law on which these penalties are based.
For late filing
It is a well known fact that late filing attracts late fee penalty. According to the late fee is Rs. 100 per day. Therefore, it is Rs. 100 under CGST and Rs.100 under SGST. Total will be Rs. 200/day (Subject to changes announced via Notifications). However, there is a limit for maximum penalty, which is Rs. 5,000. Nevertheless, there is no late fee on IGST in case of belated filing. Interest has to be paid at 18% per annum along with late fee. It has to be calculated determining on the tax to be paid by the taxpayer. The duration will be from the next day of filing to the scheduled date of payment.
For Not filing
The consequent returns cannot be filed in case you don’t file any GST return. For example, the next return GSTR-3 and subsequent returns of ‘September’ cannot be filed if GSTR-2 return of August is not filed. As a result of this, late filing of GST return will have a cascading effect leading to heavy penalty and fines.
Inspection under GST
The Joint Commissioner of CGST/SGST (or a higher officer) may have reasons to believe that in order to evade tax; a person has concealed any transaction or claimed overload/excess input tax credit, etc. In those cases, the Joint Commissioner can sanction any other officer of SGST/CGST (in writing) to examine places of business of the alleged evader.
Search & Seizure under GST
The Joint Commissioner of CGST/SGST can order for a search. He shall order a search on the basis of outcome of inspection (it can consider any other reason) if he has rational reasons to believe –
- Goods Confiscated
- Books and Documents which are hidden somewhere. (Useful for proceedings)
Those kinds of goods and documents which are incriminating can be seized.
CorpBiz Procedure for GST Registration
Kindly utilize the steps given above to integrate legally and securely a GST Registration and get the benefits in the form of Taxation. Our CorpBiz experts will be at your disposal for assisting you with guidance concerning GST Registration and its compliance for the smooth functioning of your business in India. CorpBiz professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process.
It is advisable that an attorney with “Tax experience” must be appointed to overwhelm many of the potential pitfalls that creep around within GST Registration and to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided, and the payment is received.
CorpBiz is one of the platforms which coordinate to fulfil all your legal and financial requirements and connect you to consistent professionals. Yes, our clients are pleased with our legal service! Because of our focus on simplifying legal requirements, they have consistently regarded us highly and providing regular updates.
Our clients can also track at all times the progress on our platform. If you have any questions about the GST Registration process, our experienced representatives are just a phone call away. CorpBiz will ensure that your communication with professionals is charming and seamless.
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GST Registration Guidelines According to Government of India
The guidelines According to Government of India of GST registration suggest that who should register under the GST. That's why, the government has provided the list of all the potential consumers or sellers:-
- Consumers or sellers who enrolled under the pre-existing taxation laws i.e. VAT, service tax, Excise, etc.
- People with businesses with turnover over the edge uttermost reaches of Rs. 40 Lacs* (Rs. 10 Lakhs for states counting Uttarakhand, North-Eastern States, Himachal Pradesh, and Jammu & Kashmir)
- All the Input service wholesaler and Operators of a supplier
- A person who infrequently supplies taxable goods or services in a chargeable territory is called a “casual taxable” person. For that, there is no fixed place of business that is it shifts from one place to another.
- All the Individuals that are under the deliberation of the RCM (reverse charge mechanism): In the Reverse Charge, the receiver becomes liable to pay the tax. It means that the charge of tax will gets reversed
- The entire people indulged in e-commerce. It also covers the person who equipments and supplies via e-commerce aggregator in the market.
- Individuals providing on the database access or recovery administrations and web data from a foreign place (foreign) to an individual in India, other than a registered or enlisted taxable person are all entitled for GST registration.
GST Tax Slabs Rates of Various in India, August 2020
No Tax (0%)
- Goods Tax Slabs
0% taxes will be levied on goods like sanitary napkins, marbles or wood, deities made of stone, Rakhis without any precious metals like silver, gold, raw material used in brooms, Saal leaves & fortified milk, vegetables, fruits, bread, salt, bindi, curd, sindoor, natural honey, bangles, handloom, besan, flour, stamps, eggs, printed books, newspapers, judicial papers,
- Services Tax Slabs
All hotels and lodges who carry a tariff below “INR 1,000” are exempted from GST Rate Slab taxes. The list also includes “IMM courses” and “bank charges” on the savings account, Jan Dhan Yojana.
GST Tax Slab of 5%
- Goods Tax Slabs
The goods which will attract taxation of 5% under GST include fish fillet, skimmed milk powder, frozen vegetables, coffee, coal, fertilizers, spices, tea, pizza bread, kerosene, agarbatti, ayurvedic medicines, sliced dry mango, insulin, cashew nuts, lifeboats, unbranded namkeen, Ethanol- Solid biofuel pellets- Handmade carpets and other handmade textile - floor coverings (including namda/gabba)- Includes Hand-made braids and ornamental trimming in the form of pieces.
- Services Tax Slabs
Small restaurants and transport services like railways Standalone, ACs non-ACs Restaurants and those that serve liquor, and airways, Takeaway Food, Restaurants in hotels with a room tariff > INR 7,500 (no input credit for these restaurants) will consider under this category. Special flights for pilgrims (Economy Class) come under 5%
GST Tax Slab of 12%
- Goods Tax Slabs
Items coming are the tax slab of 12% include butter, frozen meat products, cheese, ghee, pickles, sausage, namkeen, fruit juices, tooth powder, medicine, umbrella, instant food mix, sewing machine, cell phones, human-made yarn, -Handbags including pouches and purses; Wooden frames for painting, jewelry box, photographs, mirrors, etc., Ornamental framed mirrors, Art ware of iron, Brass Kerosene Pressure Stove, etc.
- Services Tax Slabs
Business class air tickets will attract a service tax of 12% under GST. The slab also comprises movie tickets priced under “INR 100.”
GST Tax Slab of 18%
- Goods Tax Slabs
Most of the items are part of this tax slab, as mentioned above. Some of the things are cornflakes, flavored refined sugar, pasta, detergents, pastries and cakes, washing and cleaning preparations, mirror, safety glass, glassware, sheets, pumps, compressors, fans, light fitting, chocolate, tractors, preserved vegetables, ice cream, sauces, soups, mineral water, deodorants, suitcase, brief case, vanity case, oil powder, chewing gum, hair shampoo, shaving and after-shave items, preparation for facial make-up, washing powder, Refrigerators, Washing Machines, Water Heaters, Televisions (up to 68 cm), Vacuum Cleaners, Paints, Hair Shavers, Hair Dryers, Hair Curlers, Scent Sprays, Lithium-ion batteries, detergent, stones used in flooring, sanitary ware, marble & granite, leather clothing, wrist watches, cookers, stoves, cutlery, goggles, telescope, binoculars, oil powder, cocoa butter, fat, artificial fruits, artificial flowers, follage, physical exercise equipment, musical instruments and their parts, some diesel engine parts, stationery items like clips, some parts of pumps, electrical boards, panels, wires, razor and razor blades, mattress, furniture, cartridges, multi-functional printers, windows, door, aluminium frames, monitors and television screens, tyres, power banks for lithium ion batteries, carriage accessories for disabled, video games, etc.
- Services Tax Slabs
Note that the restaurants located inside hotels with tariffs of INR 7,500 and above, outdoor catering (input tax credit to be available), movie tickets priced above INR 100, actual bill of hotel stay below “INR 7,500”, IT and Telecom services and financial services along with identified garments (branded) will be part of this tax slab.
GST Tax Slab of 28%
- Goods Tax Slabs
Note that over 200 goods will be taxed at 28% under this slab. The goods which will be part of this slab-category under GST are pan masala, sunscreen, dishwasher, weighing machine, paint, vacuum cleaner cement. Other items include automobiles, motorcycles, and hair clippers.
- Services Tax Slabs
As mentioned above, five-star hotels, whose actual bill of the hotel stay above INR 7,500, racing, movie tickets, and gambling on casinos and racing, will also come under this category.
Note: - This list is not exhaustive; thereby, for better understanding, please contact our CorpBiz Legal experts.
41st GST Council Meeting Updates, 27th August 2020,
The 41st GST Council was chaired by the Nirmala Sitharaman, Finance Minister of India, on 27th August 2020. The 41st GST Council Meeting has witnessed a discussion between the Center & States regarding compensating states for the deficit in revenue collection. The center has guaranteed payment for the “loss of revenue” in the first five years of the GST implementation date i.e., 1st July 2017, under the Central Goods and Services Act. Moreover, the shortfall calculation is made at an assumed 14% annual growth in GST compilations by states over 2015-16.
The Center has expressed its inability to compensate states as the COVID-19 pandemic has reduced states' compensation for states in the last few months. However, it has given them a choice of borrowing from the market. The Center has agreed to state the option of getting loans through the RBI (Reserve Bank of India) for the deficit arising due to GST's completion and implementation. It is evident that the gap also exists due to the problems caused by the COVID-19 pandemic. However, states have requested the center to give them seven days to think about the option, accessible only during the current year. The government will evaluate the situation next year.
The GST shortfall in FY 21 is INR 2.35 lakh crore in accordance with the Revenue Secretary. Under this parameter, only INR 97,000 crore is due to the implementation of GST compilations; however, the remaining amount is due to the pandemic causes.
Frequently Asked Questions
GSTIN, known as Goods and Service Tax Identification Number, consists of 15 digits. This number is generated by the government when an individual or a company has successfully applied for GST Registration.
Yes, Digital Signature Certificate (DSC) is required if you are a Public Limited Company, Private Limited Company, Limited Liability Partnership (LLP), or One Person Company (OPC).
Yes, anyone can voluntarily get GST Registration even if the annual turnover does not exceed the threshold limit of 40 lakhs or 20 lakhs in the case of the northeast.
Any business is required to get more than one GST Registration number if:
- the business entity is supplying goods & services from multiple States; then, it is mandatorily required by the business to get GST Registration in different States.
- Further, any business entity can get multiple GST Registration number even if they are operating from a single State under several verticals to avoid accounting complications between various businesses.
Composition Scheme under GST is a secure scheme made to decrease the compliance burden for the small taxpayers. Small taxpayers can pay GST at fixed rates and can get rid of tedious GST formalities under this Composition Scheme under GST. The annual turnover of any business, if, is less than ₹1.5 Crore, can choose for a composition scheme under application for GST Registration.
Composition scheme under GST Registration in India does not apply to:
- Supplier of non-taxable goods
- Manufacturer of Notified Goods
- Service providers
- E-commerce sellers
- Inter-state sellers
- Less tax liability;
- Not require maintaining detailed records;
- Need to file a single quarterly return. Four returns in a year;
- Limited compliances;
- A small amount of tax on turnover can be paid (1% for traders & 5% for restaurant);
- Can provide an auxiliary service up to 5 lakhs Rupees annually under the composition scheme.
- Cannot avail input tax credit of any purchases made;
- Cannot charge any composition tax on an invoice from the customer as usual practice in case of a normal GST scheme.
- Cannot issue tax invoice;
ARN is known as the Application Reference Number. After the successful submission of the application of GST Registration, the ARN number is generated. The ARN number is generated after uploading of the necessary documents.
HSN is known as the Harmonized System of Nomenclature. This is an internationally accepted product coding system to maintain uniformity in the classification of goods.