Many taxes in India have been replaced by GST, including excise duty, VAT, and services tax. A business must register if it sells goods for more than * 40 lakhs (* 20 lakhs in North Eastern hilly states for the sale of goods).
Service providers, however, remain subject to the same threshold limits. When the aggregate turnover of persons providing services exceeds * 20 lakh (for normal category states) and * 10 lakh (for special category states), they must register.
Eligibility for GST Registration
The penalty for businesses not registering for GST reaches up to 10,000 Indian rupees if they haven’t done so.
GST registration is mandatory for the following individuals and organizations:
- Goods and services supplied interstate by businesses
- Taxpayer who is not a resident
- Person who is casually taxable
- Taxpayers whose accounts are reversed
- The companies that are registered under old tax systems, such as VAT, excise, and service tax
- For states in the normal category who have chosen the new threshold, any business engaged in the supply of goods will be eligible for the new threshold if its turnover in the fiscal year exceeds *40 lakhs (*20 lakhs for special category states, for example Telangana).
- In a normal category state, any business rendering services that generates more than *20 lakhs in revenue per fiscal year (*10 lakhs in a special category state) is considered a service business.
- Suppliers’ agents
- Those who provide input services
- Providers of online information, database access, and retrieval services to individuals and businesses within India from outside
- Aggregators of electronic commerce
- E-commerce aggregators provide goods and services to businesses
- A central or state government may notify individuals or businesses on the GST Council’s recommendation.
GST Registration Process – The GST registration is not mandatory, but you can opt to do so voluntarily. In addition to the provisions that apply to taxable persons who are registered, you are also subject to these provisions. The same rules would apply to you as they would to any other taxable person.
Benefits of GST Registration
Taxpayers who register for GST will benefit in the following ways:
- Legal recognition will be given to them as a supplier of products or services.
- Their customers will be able to pay taxes legally.
- Purchasers and recipients of goods and services will also be able to claim tax credits for taxes paid.
- Those who are registered taxpayers under the GST regime can also claim input tax credits for taxes they have paid on purchases or purchases of goods, which can then be used to pay taxes due on the provision of goods or services.
- Moreover, mandatory GST registration ensures that ITC are consistently distributed on a national basis between suppliers and recipients.