GST Registration
GST is a goods and services tax that is levied by the government to replace many indirect taxes. Any business offering sale of goods with an annual turnover of 40 lacs or service with an annual turnover of 20 lacs would require to do GST registration and should have a valid GST Number. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017.
“GST is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.”
This tax removes all the indirect taxes that are imposed by the central government and the state government previously in India. To be applicable for this, the businesses need to have done GST registration.
Who must get GST Registration?
1. People who enrolled under the pre-existing taxation laws i.e. Excise, VAT, service tax, etc.
2. Businesses with turnover over the edge furthest reaches of Rs. 40 Lakhs* (Rs. 10 Lakhs for states including North-Eastern States, J&K, Himachal Pradesh, and Uttarakhand)
3. Operators of a supplier and Input service wholesaler.
4. A person who occasionally supplies taxable goods or services in a taxable territory is called a casual taxable person. There is no fixed place of business, that is it moves from one place to another.
5. Individuals that are under the consideration of the reverse charge mechanism: Reverse Charge, the receiver becomes liable to pay the tax, i.e., the charge of tax gets reversed.
6. Every e-commerce person.
7. A person who supplies via e-commerce aggregator.
8. Individuals providing on the web data and database access or recovery administrations from a place outside India to an individual in India, other than an enlisted taxable person are all eligible for GST registration.
Document required for GST registration
Based on the category of the individual or their business ownership, different sets of documents are required during GST registration.
For a sole proprietorship, the following details of the owner are required.
- PAN Card
- Aadhar Card
- Passport Size Photograph
- Address Proof
- Bank Account Details
For a Public or Private Limited Company, the following documents are required:
- Company’s PAN Card
- The certificate of Incorporation which is issued by the Ministry of Corporate Affairs
- Authorised signatory’s PAN and Aadhar details. (He/She must be a citizen of India)
- Passport sized photo of the authorized signatory
- MOA and Article of Association
- Pan card of all Directors of the company
- Address Proof of all Directors
- Passport sized photo of all the directors
- Address proof of the business place
- Bank Account details
For a Partnership Firm, the following are required:
- Details of all partners and the authorised signatory (PAN, Address Proof, Passport sized photograph)
- Copy of the partnership deed
- Registration Certificate/ Board resolution in case of LLP firms
- Business Address Proof
- Bank Account Details
For a HUF, the requirements are as follows:
- PAN Card of HUF
- Photograph of the owner
- PAN and Aadhar of Karta
- Address proof for the place of business
Difference between GST types:
1. CGST: CGST (Central GST) is implemented on the supply of goods and services. This tax is levied on the interstate supplies and is governed by the central government. The central government will hold on to revenue collected under CGST.
2. SGST: SGST is a tax applied on Intra State supplies of both the goods and services by the State Government and will be administered by the SGST Act. The revenue is collected by the state government. However, the mainstream work of the state government is governed by the central government only.
3. IGST: IGST is charged on the supplies of goods and services from one state to another. Therefore, it is stated as the interstate tax. This tax is also applicable to the supplies of goods and services in both the case of import into India and export from India. The revenue is collected by the government of India.
4. UTGST: Delhi (India’s Capital Territory), Chandigarh, Dadra & Nagar Haveli, Andaman & Nicobar Islands, Daman & Diu, Lakshadweep, and Puducherry are the prominent union territories in India. UTGST applies to all these union territories. The revenue is collected by the union territory government. UTGST is levied with the CGST only.
These taxes are implied on the businesses only after their GST registration.
Products that come under the GST are divided into 4 slabs that are 5%, 12%, 18%, and 28%. 0% slab is the tax exemption slab and it does not come under the GST tax rate list.
Products and goods that come under these slabs are as follows:
Under 5% slab: Consumables like Sugar, coal, coffee beans, tea, packed paneer, raisin, edible oil, PDS Kerosene, domestic LPG, skimmed milk powder, cashew nuts, footwear (< Rs.500), milk food for babies, apparels (
Under 12% slab: Butter, computers, ghee, processed or packaged food, almonds, mobiles, fruit juice, preparations of vegetables, fruits, nuts or other parts of plants including pickle murabba, chutney, jam, jelly, packed coconut water, and umbrella.
Under 18% slab: Hair Oil, Capital goods, Toothpaste, Industrial Intermediaries, Soap, Ice-cream, Pasta, Toiletries, Corn Flakes, Computers, Soups, and Printers.
Under 28% slab: Small cars (+1% or 3% cess), High-end motorcycles (+15% cess), Consumer durables such as AC and fridge, Luxury & sin items like BMWs, and aerated drinks (+15% cess), cigarettes.
Exempted goods:
Food: Cereals, edible fruits and vegetables, edible roots and tubers, fish and meat, tender coconut, jaggery, tea leaves (not processed), coffee beans (not roasted), seeds, ginger, turmeric, betel leaves, papad, flour, curd, lassi, buttermilk, milk, and aquatic feeds, and supplements.
Raw Material: Raw silk, silk waste, wool (not processed), khadi fabric, the cotton used for khadi yarn, raw jute fibre, firewood, charcoal, and handloom fabrics.
Tools: Hearing aids, hand tools (such as spades and shovels), tools used for agricultural purposes, handmade musical instruments.
Exempted Services:
Agriculture services: Agricultural services including harvesting, fumigation, cultivation, packaging, renting, purchasing or leasing machinery for agricultural purposes, activities involving the warehouses, the supply of farm labour are all included under the exempted services.
Transportation Service: Transportation of merchandise by inland waterways, Transportation of travellers via air (in the conditions of Manipur, Meghalaya, Assam, Arunachal Pradesh, Nagaland, Sikkim, Tripura, and Bagdogra), Transportation by non-AC, transportation of rural produce, milk, salt, papers, or woodgrains, Transportation of merchandise where the gross sum charged is not as much as Rs. 1500.
Educational service: Services include student and faculty transportation, mid-day meal catering services, security, housekeeping and services during admission, examination etc.
Medical services: Services provided by a veterinary clinic; health-care services provided by clinics or paramedics, services provided by ambulances, charities, and organizations facilitating religious pilgrimage.
How to find HSN number or Service tariff code for GST...
HSN code means “Harmonized nomenclature system.” This method was implemented all over the world for the systematic classification of products. HSN code is a standardized 6-digit code, which classifies 5000 + products and is recognized worldwide. The World Customs Organization (WCO) established it, and it came into practice in 1988.
Services Accounting Code (SAC) in GST: Goods, services likely to one another are also classified for recognition, measurement and taxation in a uniform manner. The codes for these services are called Services Accounting Code or SAC.
How does HSN code works? –
The HSN structure will contain 21 sections, 99 Chapters under them, with about 1,244 headings, and 5,224 subheadings respectively.
Each Section is divided into multiple Chapters. Each chapter is separated into Headings which is in turn divided into Sub Headings.
The titles of sections and chapters describe the varied categories of goods, whereas the headings and subheadings provide detailed descriptions of the products.
HSN codes seek to make GST universal and embraced globally.
HSN codes delete the need to upload a comprehensive product summary. Because GST tax filing returns are automated, this will save time and make filing easier. HSN code can be symbolized in 8 digits and each digit has some meaning:
The first two digits indicate the Chapter under HSN codes.
The next two digits indicate the headings under Chapters.
Next 2 digits indicate the sub-headings, 6 digits HSN code is accepted worldwide.
The next 2 digits sub-classify the product tariff heading during import and export of supply.
Effect of GST on foreign trade
The implementation of Goods and Services Tax (GST) has had a significant effect on India’s foreign trade as it has brought about changes in the system of taxation on imports and exports and abolished various indirect taxes and exemptions.
For export services from India:
The rules for inter-state service provision are therefore relaxed. In the case of service exports, an exporter may take advantage of the input tax credit or claim reimbursement of production taxes paid only if they are licensed under the GST Act.
In addition, in compliance with the provisions of the Integrated Goods & Services Tax (IGST) law, the export of products and/or services is considered to be a zero-rated supply and in such a scenario an exporter is entitled to demand GST refund.
For Import services to India:
Imports under GST are regarded as inter-state supplies and thus subject to taxation. Once goods are imported into India, along with customs duty, IGST is levied on the value of the goods. The Harmonized Nomenclature System (HSN) is used to classify goods and measure IGST and customs duty under the GST system.
Imports are to be completely taxed in India under the proposed GST, irrespective of whether the imported goods and services are manufactured in India or not, thus giving domestic producers a level playing field, especially in the import-substitution industry. This will support the government’s ‘ Make in India ‘ initiative.