What is GST?

Goods and Service Tax is the tax applied on the goods and services by the Indian Government. It is an indirect tax that replaces many direct taxes such as excise duty, VAT, Service Tax, etc, in India. GST was passed by parliament on 29th March and was implemented all over the country on 1st July 2017.GST is divided into different types as per the threshold limit such as Normal Taxpayer, Casual Scheme, and more.

GST in India is an extensive, multistage, and destination-based tax that is applicable on the value addition. However, it can be said that GST is a single domestic indirect tax law for the country. Shopkeepers, customers, and consumers pay the GST which results in revenue generation by the Indian government. The final price of all goods and services includes GST. Goods and Services Tax is the only direct tax imposed by central and state governments. It has removed all the direct taxes.

Types of GST in India

Good and Services Tax is divided into four types – State Goods and Services tax, Integrated Goods and Service Tax, Central Goods and Services Tax, and Union Territory Goods and Services Tax. The tax rates on the goods and services for all four types are different. However, all the taxes are applicable only after successful GST registration.

  • Central Goods and Services (CGST) – It is the tax collected by the central government on the intrastate transaction of goods and services. It is charged along with GST or UGST and the generated revenues are shared by the central and state government.
  • State Goods and Services Tax (SGST) – It is the tax collected by the state government on the intra-state transaction of goods and services. SGST is earned by the state government where the transaction is made.
  • Integrated Goods and Services Tax (IGST) – It is the tax mulcted on the inter-state supply of goods and services. It is also applicable to imports and exports. IGST is shared by both state and central governments.
  • Union Territory Goods and Services Tax (UGST) – It is the tax mulcted by the prominent Union Territories of India. UGST is applicable on all the union territories of India. UGST and CGST are levied together and are collected by the government of the respective territory.

What is the requirement of GST?

Goods and Services Tax is introduced to reduce the tax burden on both consumers and companies. Before GST, there are numerous taxes imposed at every phase of production and supply of goods and services. So, the item cost, not used to reflect the genuine price of the goods, and the amount of tax is applicable to it. The previous tax system was incompetent and successfully replaced by the new GST in India.
Indian Government integrated all the taxes and made the one uniform taxation system by introducing Goods and Services Tax. GST was introduced after the passing of four bills successfully.

GST Registration Guidelines

  • Before applying for GST, every taxable person should declare his PAN, address, mobile number and location.
  • After verifying the PAN number, mobile number, and email address, a temporary reference number will be given to the applicant.
  • The application shall be forwarded to the officer and grant permission for the GST registration.
  • Separate registration will be done for the multiple business verticals in State and Union Territory.
  • A non-resident taxpayer shall electronically submit an application along with the passport, atleast 5 days prior to the commencement of business.
  • Every registered person will be granted the unique identification number may submit an application electronically at the common portal

Types of GST registration

Normal scheme

When the business turnover is worth more than 20 lakhs, the GST registration falls under the normal scheme.

Non-resident taxable person

When a non-resident taxpayer supplies goods and services in the territory where GST applies but doesn’t have any fixed place of business in India.

Casual taxable person

When a person occasionally supplies goods or services in the territory where GST applies and also doesn’t have a fixed business place.

Composition scheme

When the aggregate turnover of the business is less than 1.5 crores, then the entity falls under the composition scheme of GST.

Documents required for GST registration

Here are the following documents that must be submitted for GST registration by regular taxpayers:
  • PAN card of the business
  • Identification proof
  • Photographs of the applicant
  • Address proof of the applicant
  • Business registration document
  • Business location proof
  • Bank account statement

Read more about GST registration

GST Turnover limit

A business with an overall turnover of more than Rs.20 lakhs must be registered under the Goods and Services Tax.

Documents Required

PAN card, proof of business registration, identity, photographs and address proof of the person in charge, the business address, and bank account statement.

GST Certificate

GST Certificate is valid proof of getting registered under GST in India. It is mandatory for the business whose turnover crosses the threshold limit.

GST invoice format

It is the format of the invoice generated for the goods and services under GST registration. It should be under fixed format for successful usage.

Interstate vs Intrastate

Interstate supply attracts Integrated goods and services, whereas intrastate supply includes both Central and State goods and Service Tax.

Multi-branch registration

For the same state, there is no need for separate GST registration. But for the multi-state, separate GST registration for each state is required.

General questions (5)

What is the due date for applying for registration under GST?

After initiating the registration and becoming eligible for GST registration, the applicant has to complete the registration through the common online portal, within 30 days from the application date.

What is the primary authorized signatory?

Primary authorized signatory is the primary person responsible for the action on the GST system portal. All the notifications and important information will be sent to the primary authorized signatory.

Is PAN mandatory for obtaining GST registration?

Yes, GST registrations require PAN (Permanent Account Number) of the authorized signatories/applicant. Almost all government processes demand PAN.

What is the validity of the GST registration?

For the regular taxpayers, there is no expiry date of GST registration until or unless it is not surrendered. But non-resident and casual taxpayers have the validity date mentioned on the GST registration certificate.

Can a person with no GST registration can collect GST?

No, a person with no GST registration cannot collect GST from his customers. He neither can claim any input tax credit of GST paid by him.

E Way Bill

What is an E-Way bill?

Waybill is an electronic bill for the movement of goods and should be generated from the Waybill online portal. To transport goods worth more than Rs.50,000, an entity should have an E-Way bill.

What are the benefits of the Waybill?

To transport goods smoothly in both inter and intra states, quicker turnaround times, convenient way to generate bills, better tax compliance method due to the online mode, and more.

When E-Way Waybill generated?

For the GST registered person, the E-Way will be generated when the value of the goods is worth more than Rs.50,000. Transporter of the goods has to carry the bill, wherever he goes with the goods.

Is it mandatory to generate an E-Way bill?

Yes, if you want to transport goods that cost more than Rs.50,000, you have to generate an E-Way bill for the goods from the online portal. It is a must-have bill to transport goods.

What will be the penalty for not generating the Waybill?

Transporting goods without generating an E-Way bill is a serious offense. You will be charged with a minimum penalty of Rs.10,000. After adding the taxes, the charges might increase.