GST (Goods and Service Tax) is being impleted all over India soon and many retailers are still confused whether GST registration is mandatory or not? Here is the complete details regarding all your queries.
Any supplier who carries any business at any place in India and whose aggregate turnover exceeds 20 lakh rupees in a year is liable to get himself/herself registered.
What is the meaning of aggregate turnover?
It means all taxable and non taxable supplies, exempt supplies, export of goods and service of a person having the same PAN.All above shall be computed on all India basis and excludes taxes charges under the CGST Act, SGST Act and the IGST Act.
Aggregate turnover does not include value of supplies on which tax is levied on reverse charge basis, and value of inward supplies.
When is Registration compulsory?
Even though your aggregate turnover is less than 20 lakh, there are some cases when registration is compulsory.
- Person making any inter state taxable supply(supplying from one state to other state)
- Casual taxable person ( Person who occasionally undertakes transactions in a territory where he has no fixed place of business)
- Persons who are required to pay tax under reverse charge.
- Non resident taxable persons. (Person from outside india coming here and having no fixed place of business)
- Persons who supply goods or services on behalf of other taxable persons as an agent.
- Persons who supply goods or services other than branded services, through electronic commerce operator.
- Every electronic commerce operator.
- An aggregator who supplies services under his brand name or his trade name.
From the above details it is clear that as long as you are doing business in a particular state and not related with any ecommerce company like flipkart and amazon and your turnover is below the limit prescribed, you need not worry a lot and do your business as usual. But do maintain account books so that at any time if any officer come to check whether your turnover is within the limit or not, you can easily show the previous year turnover which is below the limit.
But remember once your turnover reaches 19 lakhs it is necessary to register for GST.
What are the advantagesof registering in GST?
There are lot of advantages too if you register for GST.
- Legally recognized as supplier of goods or services.
- You can claim ITC(Input Tax Credit) being paid on your purchases back.
- You can legally collect GST from your customers.
Can I register for GST even though my business turnover is less than 20 Lakhs?
Yes. Its your choice. You can do voluntary registration and get GSTN number. But remember you will be treated like all other persons above 20 lakh turnover and have to file 3 returns under GST every month via online and one annual return.
What is kept outside GST?
Alcohol for human consumption, petroleum products like motor spirit, diesel, natural gas, aviation turbine fuel and electricity. Existing VAT and Cetral Excise will cover these items.
What is composition scheme under GST?
Maintaining accounts and filing monthly returns may not be possible for all small business people. Hence there is a composiyion scheme for small tax payers.
If aggregate turnover ina year is below 75 lakhs and above 20 lakhs then only this scheme will apply. Government may even increase this limit upto 1 crore.
Under this scheme tax payer has to pay tax as a percentage of his turnover during the year. Bad news here is no input tax credit can be availed by tax payer. This scheme is optional and not compulsory. That means you can ignore this if you dont like it.
Tax rate under composition scheme
1% of turnover in case of manufacturer
2.5% for restaurant owners
0.5% for other suppliers.
Who is not eligible in composite scheme?
Tax payers making inter state supply and taxpayers paying charges on reverse charge basis are not eligible under composite scheme.
All GST returns have to be file every month via the official site www.gst.gov.in.
Hope this info is helpful for deciding whether GST is necessary for your business or not. If youhave any doubt then do leave a comment and I will try to clarify your query.