GST has been the most significant tax reform undertaken in India which has improved the ease of doing business and also simplified the tax regime. It has increased the taxpayer base by effectively replacing earlier system of multiple taxes (VAT, CST, Octroi, service tax etc.) into a single unified system.
Under GST any individual or legal entity involved in buying, selling of good or services are required to apply for GST registration.
The GST rate structure is divided into four slabs i.e. 5 %, 12%, 18% and 28%. The highest 28% slab is reserved for especially sinful items like cigarettes, alcohol etc.
Any business that supplies goods or services that has an annual turnover of more than 25 lakhs will have to mandatorily apply for GST registration. In the north eastern states (entities in special category states) those businesses having an annual turnover of more than Rs.10 Lakhs are necessarily required to do GST registration.
Any business that has not been registered with GST will not be allowed to avail input tax credit on GST paid and even be penalized.
A 15 –digit unique identification number GSTIN (GST Identification number) will be generated upon acceptance of the GST application after perusing supporting documents submitted. A login and temporary password will be issued finally after all verification and acceptance using which you will have to file GST returns.
CGST, SGST and IGST
The CGST or Central GST is the domain over which Central Government has the power to collect taxes.
The SGST or State GST is the domain over which the State Government has the power to collect taxes.
The IGST or Integrated GST is levied on inter-state transactions. The Central government will collect the same and disburse it to the State governments.
Documents needed for GST registration
In case of a sole proprietorship the PAN Card/ address proof of the individual.
In case of general partnership PAN card of partnership/Partnership agreement/ Partners details and address proof
In case of an LLP the PAN Card of LLP/ LLP Agreement/Partners details and address proof.
In case of Private Limited Company the PAN card of company/ Identity and address proof of directors /Memorandum of Association/Articles of Association/ Certificate of Incorporation, resolution signed by board members.