GST is brought in to bring all the taxes under one regime. The sum of the following taxes results in GST.
Central Excise duty
Central sales tax
Entertainment and amusement tax
Taxes on lotteries, betting, gambling
Hence all the taxes claimed on manufacturing, trading, importing, exporting, consumption of goods and services are now popular as GST. It has merged the central and state taxes. But GST has 3 parts.
SGST– State GST
CGST– Central GST
IGST– Integrated GST
GST slab rate is 5%, 12%, 18% and 28% for different goods and services. There are some goods and services which are relieved from the GST.
Voluntary GST Registration
While some businesses fall under mandatory GST registration, there are a few where a person does not come within the criteria as described above and wants to take GST registration then he/she can get the registration voluntarily as other business registrations and licenses. Voluntary registration has advantages as well as some liabilities.
It will increase the number of buyers, as the buyer likes to purchase from a person giving tax invoices. Only a registered person can grant the tax invoices.
Sales can be increased by an inter-state supply of goods or services without any restriction. Also, they can sell their products on an e-commerce platform easily.
One can acquire input tax credit on the purchase of goods or services which will help in decreasing expenses.
GST provides a rating to taxpayers based on their compliances and regularity which helps them to upscale the image of the entity.
It will be convenient to get credits and loans for the registered person due to transparency in the business.
The registered person has to compulsorily collect GST and must convey it to the government. If the tax is not collected, then the person has to pay it from the total amount acknowledged considering that the amount is inclusive of taxes.
The person has to file all quarterly and annual returns regularly. Else, the government will charge penalties.
In case of any default, penalties can be demanded and can affect credit rating.
Mandatory GST registration
GST registration is not mandatory for every business. The ministry has specified some criteria, to clarify this:
The following persons have to take online GST registration.
GST registration is mandatory for the inter-state supply of goods.
If the turnover of the supply of goods within the same state exceeds Rs. 40 lakh except for Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand.
A person involved in the supply of services has to take registration if the turnover exceeds Rs. 20 lakh except for Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand.
Persons involved in the supply of goods and services in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand has to register if turnover is greater than Rs. 20 lakh in case of goods and 10 lakh in case of services.
An e-commerce operator who gives a platform to buy and sell goods and services has to get GST registration even if the turnover does not attract the specified limit.
An input service distributor has to register mandatorily.
If the supplier is a non-resident taxable person, such a person has to get registered under GST.
A person who is needed to pay tax under the Reverse Charge mechanism.
Any person who is acting as an agent of a franchiser or supplier has to register under it.
Any person who is withdrawing TDS or TCS in GST has to register under it.
A person giving online information or database services in India from outside India has to get registered.
Any other person as notified by the government.
GST registration is only compulsory for the persons specified by the government. But if a person wants to get the registration then he must follow all the compliance. So the voluntary registration is like a two-sided coin that has benefits along with some liabilities.