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Goods and Service tax is a new indirect tax in India. Almost 18 indirect taxes have been subsumed in GST making it single and common indirect tax regime to be functioning across India. Till 25th June, 2017, persons having registration under excise, service tax, vat and other old indirect taxes were allowed to migrate into GST. But with effect from 25th June, 2017, now persons are allowed to take new registration for his or her business. Apart from this government has also allowed professionals to enroll as GST practitioner in GST regime. Only GST practitioners are allowed to file gst returns on behalf of their clients.
What is GST Registration?
Every business carrying out a taxable supply of goods or services in India and whose turnover exceeds the threshold limit of Rs. 20 lakh/10 Lakh as applicable will be required to take GST registration. Persons having registration in any of old indirect taxes can migrate to GST instead of taking new GST registration.
Why is GST Registration Important?
GST registration is critical because it will enable you to avail various benefits that are available under the GST regime. One such benefit is to avail seamless input tax credit. Multiple taxes are being clubbed under GST and thus the cascading of taxes that is prevailing currently will no longer be the case.
A person who occasionally supplies goods and/or services in a territory where GST is applicable but he does not have a fixed place of business. Such a person will be treated as a casual taxable person as per GST.
Example: A person who has a place of business in Delhi supplies taxable consulting services in Patna where he has no place of business would be treated as a casual taxable person in Patna.
There is an option available to small businesses and taxpayers having a turnover less than Rs. 50 lakhs. They can opt for Composition scheme where they will be taxed at a nominal rate of 1% or 2.50% (for manufacturers) CGST and SGST each (rates are final and will be notified later).
They will be required to maintain much less detailed records and file only 1 quarterly return instead of three monthly returns. However, they cannot issue taxable invoices, i.e., collect tax from customers, but are required to pay the tax out of their own pocket. They cannot also claim any input tax credit.
GST will apply when turnover of the business exceeds Rs 20 lakhs (Limit is Rs 10 lakhs for the North Eastern States and special category states).
Migration to GST
All existing Central Excise and Service Tax assessees and VAT dealers are required to be migrated to GST. To migrate to GST, assessees would be provided a Provisional ID and Password by CBEC/State Commercial Tax Departments.
Provisional IDs would be issued to only those assessees who have a valid PAN associated with their registration. An assessee may not be provided a Provisional ID in the following cases:
- The PAN associated with the registration is not valid
- The PAN is registered with a State Tax authority and Provisional ID has been supplied by the said State Tax authority.
- There are multiple CE/ST registrations on the same PAN in a State. In this case, only 1 Provisional ID would be issued for the 1st registration in the alphabetical order provided any of the above 2 conditions are not met.
The assessees need to use this Provisional ID and Password to login to the GST Common Portal (https://www.gst.gov.in) where they would be required to fill and submit the Form 20 along with necessary supporting documents.
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