What is GST (Goods & Service Tax) ?

GST stands for Goods and Services Tax, which is a comprehensive indirect tax that was introduced in India on July 1, 2017. The GST replaced multiple indirect taxes levied by the central and state governments, such as VAT, excise duty, service tax, etc. The GST is levied on the supply of goods and services and is applicable throughout India.

Under GST, the tax is levied at every stage of the supply chain, from the manufacturer to the consumer. This is known as the “taxable event,” which includes the manufacture, sale, and consumption of goods and services.

The GST is a destination-based tax, which means that the tax is levied at the place where the goods or services are consumed. For example, if a manufacturer in Delhi sells goods to a retailer in Mumbai, the tax will be collected in Mumbai, where the goods are consumed.

What are the GST Tax Slabs in India?

GST has a four-tier tax structure: 5%, 12%, 18%, and 28%. In addition, there is a zero tax rate for essential items such as food grains, medicines, and education. The GST Council, which is a constitutional body, decides on the tax rates, exemptions, and thresholds.

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Overall, GST has brought about significant changes to the Indian taxation system, making it more transparent and efficient, and contributing to the development of the country.

What are the benefits of GST Registration?

GST has several benefits, including simplification of the tax structure, uniformity in tax rates, reduction in tax evasion, increased revenue, benefit to consumers, and boost to economic growth.

  1. Legitimacy: GST registration provides legitimacy to a business as it is a legal requirement. It helps to build trust among customers, vendors, and financial institutions.
  2. Input Tax Credit: GST registration allows businesses to claim input tax credit (ITC) on the GST paid on the purchases made. This means businesses can reduce the overall tax liability and avoid double taxation.
  3. Increased market reach: GST registration is necessary for businesses looking to expand their operations across state borders. It provides the necessary compliance to operate in different states.
  4. Compliance benefits: GST registration helps businesses comply with GST laws and regulations. It reduces the risk of penalties and legal action due to non-compliance.
  5. Business growth: GST registration can help businesses to grow by increasing their credibility and enabling them to take advantage of various government schemes and incentives.
  6. Competitive advantage: GST registration can provide a competitive advantage to businesses by reducing their tax liability, allowing them to offer products and services at competitive prices.
  7. E-commerce benefits: GST registration is mandatory for businesses engaged in e-commerce activities. It provides access to various online marketplaces and improves the overall efficiency of e-commerce operations.
  8. Improved supply chain management: GST registration provides businesses with a unique GST identification number (GSTIN) that is required for all transactions in the supply chain. This helps to track the movement of goods and services, reducing the risk of tax evasion.
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Overall, GST registration provides various benefits to businesses, including compliance, competitiveness, credibility, and growth opportunities. It is a necessary requirement for businesses looking to expand their operations and take advantage of various government schemes and incentives.

How to apply for GST Registration Online ?

Businesses can apply for GST registration online through the GST portal. The registration process involves the following steps:

Step 1: Visit the GST portal (www.gst.gov.in) and click on the ‘Services’ tab. Then, select the ‘Registration’ option and choose ‘New Registration’.

Step 2: Enter the required details, such as the legal name of the business, PAN, email address, and mobile number. An OTP (One Time Password) will be sent to the mobile number and email address provided.

Step 3: Enter the OTP and click on ‘Proceed’.

Step 4: A Temporary Reference Number (TRN) will be generated, which will be sent to the registered mobile number and email address.

Step 5: Go to the GST portal and click on ‘Services’ > ‘Registration’ > ‘New Registration’ again. Select the ‘Temporary Reference Number (TRN)’ option and enter the TRN and captcha code. Then click on ‘Proceed’.

Step 6: Fill out the application form and provide the required details, such as business details, bank account details, and authorized signatory details.

Step 7: Upload the necessary documents, such as PAN, Aadhaar, and proof of address.

Step 8: Submit the application form and the necessary documents.

Step 9: After submitting the application, a verification process will be initiated, and the GST officer may request additional documents or information if required.

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Step 10: Once the verification is complete, the GST registration certificate will be issued.

Some frequently asked questions (FAQs) on GST:

What is GST? :

GST stands for Goods and Services Tax. It is a comprehensive tax system that has replaced multiple indirect taxes such as VAT, Service Tax, Excise Duty, and others.

What are the benefits of GST?

Some of the benefits of GST include the simplification of the tax system, reduction of tax evasion, better compliance, and a boost to the economy.

Who is liable to register for GST?

Businesses whose annual turnover exceeds Rs. 40 lakhs (for goods) and Rs. 20 lakhs (for services) are required to register for GST.

What is the GST registration process?

The GST registration process involves filling out the application form online, submitting the required documents, and undergoing a verification process. The GST certificate is issued upon successful verification.

What is the GST rate?

The GST rate varies based on the type of goods or services. The GST rates are 0%, 5%, 12%, 18%, and 28%.

Can I claim input tax credit (ITC) under GST?

Yes, businesses can claim ITC on the GST paid on inputs, capital goods, and input services used in the course of business.

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