GST registration or Goods Services Tax is effective from July 1, 2017. Until then the Indian tax system was very complex. The last decade saw the introduction of a new tax called the service tax. In addition, there are a lot of central and state taxes that require special invoices (challans). The range of tax evasion and evasion is high and is also prone to disputes and lawsuits. In 2007, there was speaking about the implementation of GST by 2010. After a long delay, the new tax regime came into force as these methods worked slowly.
GST registration
Every business with a turnover of more than Rs. 20 lakh has to register for GST. In the case of special category states, every business with a turnover of over Rs.10 lakh is required to register for GST.
Any business providing services is required to register for GST irrespective of turnover. In addition, any business selling goods or services within the state borders must have GST registration.
GST Ledger
GST registration specifies about the e-ledger, where it acts as e-passbook. Each business must maintain a GST ledger (or set of ledgers) that displays the following information.
SGST
Inputs- CGST
Inputs for IGST
SGST,Outputs
Outputs for CGST
IGST-Output
Also, maintain an electronic cash ledger.
Record keeping
The tax authorities should provide at least the following data about GST registration whenever asked:
Buying and selling of goods and services
Manufacture of goods
Stock records
There should be separate accounts for those who have to pay GST and those who can receive GST.
Maintenance length
All record books must be maintained for at least 6 years from the last date for filing of annual returns. If the accounts and records are not maintained as specified, there will be a penalty as determined by the tax authorities.
Frequency
GST Returns include GST paid GST, GST Refund Claim as well as purchase details and sales.
GSTR Form 1, 2, 3 should be filed monthly, GSTR 9 annually. GSTR 9 will come on December 31st after the end of the financial year. GSTR9 for the period 2018-19 will be filed on 31st December 2019.
GST Composition Scheme
Similarly,The Composition Scheme is a simplified format through which a non-sales taxpayer can deposit only quarterly income of over Rs. 50 lakh in the previous year. The main advantage is the low level of compliance. The error is that goods cannot be sold outside the state and do not receive an input tax credit.
Benefits of GST registration
1. Eliminates the cascading effect of the GST tax
GST was design and implement to bring indirect taxation under one umbrella. Most importantly, it eliminates the cascading effect of taxes. The cascading tax effect can best be express as ‘tax on tax’. To alleviate this problem, an Input Tax Credit (ITC) is create for businesses under the benefits of GST. The concept is very simple ‘you buy goods from different vendors for your business and pay GST when needed. Then, when you sell your service or products, you charge GST from your customers. Every month, government officials expect you to pay that amount in taxes.
2. High admission for GST registration
Earlier, in the construction of VAT, a business with a turnover of over Rs 5 lakh (in most states) is liable to pay VAT (value added tax). Also, the tax depends on the nature of the business in which you are operating and service tax exemption is give to service providers with a turnover of less than Rs 10 lakh. Now, with the advent of GST, service provider companies with a turnover of less than Rs 20 lakh are exempt and take advantage of GST in business. In the case of North-eastern states, the entry is Rs 10 lakh. This will help small business owners avoid lengthy tax procedures.
3. Composition scheme for small businesses
Again,Under the GST regime, small businesses (with a turnover of Rs 20 to 75 lakh) can make a profit and pay only 1% of their turnover tax as it provides an opportunity to reduce taxes by using the composition scheme. This has reduced the burden of taxes and compliance on many small business owners. The benefit of GST registration for small businesses in India is that it helps reduce corruption and sales without receipts.
4. Simple and easy online approach
Then,The entire general GST process (registration to file returns) is process through online with super simple operations. This is beneficial for start-ups as it does not require entry into various registrations such as VAT, Excise and Service Tax.
Important updates of GST registration
Firstly,The government has taken a steady step in establishing the GST system efficiently and effectively. There are number of changes implement and new formats are introduce to make the system responsive and taxpayer-friendly. Some of the updates are list below.
New Invoice Registration portal
Additionally,The new invoice registration portal has been introduced which will be generating e-invoices, which have been uploaded by the suppliers. E-invoices will be sent to the suppliers and the recipients by the IRP.
New GST return filing system
Also,Simplified automated GST return has been implement from 1st April 2020, for all the taxpayers.
GST form Annexure 1 and 2
Similarly,GSTR1 will have the replacement by Annexure 1 outward supplies and GSTR2 will have the replacement by the Annexure 2 of inward supplies. These two reports will act as key for the filing of the GSTR in future.
Restriction of the claim of ITC
Additionally ITC was in respect of the invoices, of invoices which have not been reflect in taxpayers from GSTR 2A, shall be restrict to 10% of eligible ITC in GSTR 2A.
DIN notices and e- scrutiny
Similarly, In order to check whether there are any significant changes, which are present in the deviations in the returns, there will be large scale e-scrutiny and will have e-assessment of the notices with DIN.
GST network will have engineering
Services such as reminders of return filing, status of refunds, ITC claim imbalance are coming to increase transparency and effectiveness in the GST registration system. These and other changes are likely to enable the GST to comprehend and compile all the details related to the goods and services tax. Finally,the government is making progressive changes in this direction over time. It shows their commitment to make GST a highly effective, transparent and efficient system.
