Goods and Services Tax (GST)

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What is Goods and Services Tax (GST)?

GST is levied on supply of goods or services or both except taxes on the supply of the alcoholic liquor for human consumption.
GST is introduced in 1st July 2017
It is indirect tax.
HSN (Harmonised System of Nomenclature) is used for classifying the goods under the GST.
GST is levied on all goods and services, except alcoholic liquor for human consumption and petroleum crude, diesel, petrol, ATF and natural gas.
GST comprises of –

CGST: It is levied and collected by Central Government on intra-state supply (within State)

SGST/UTGST: It is levied and collected by State Government on intra-state supply (within State)

Note: CGST and SGST/UTGST is charged simultaneously on intra-state supply of goods or services or both.

IGST: It is levied and collected by Central Government on inter-state supply (One state to another state)

Every Supplier is required to obtain GST registration in the State or the Union territory from where he makes the taxable supply of Goods or Services or both if his aggregate turnover exceeds specified threshold limit in a financial year ;
Any person who is registered under an earlier law such as Excise, Service tax, VAT etc;
A person making inter-state supply of goods or services or both;
Casual Taxable Person;
Non-resident taxable person;
Agent of the supplier;
Person paying tax under reverse charge mechanism;
E-commerce operator or aggregator;
Person supplying online information and database access or retrieval services from a place outside India to a person (unregistered) in India.

Any business entity which is engaged in exclusively supply of goods and whose aggregate turnover exceeds Rs. 40 lakhs in normal category states and Rs.20 lakhs in special category states.
Any business entity which is engage in supply of goods or services or both and whose aggregate turnover exceeds Rs.20 lakhs in normal category states and Rs.10 lakhs in special category states.

There are two types to get GST Registration:

Normal Registration: It is opted by taxpayer who/which wants to maintain books of accounts or mandatory to register under this.
Composition Scheme: It is opted by taxpayer who/which do not maintain books of accounts.Under this scheme, taxpayer is liable to pay GST at specified rate on total supply of goods or services.

Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opt by any taxpayer whose turnover is less than Rs. 1.5 crore/75 Lakhs (For sale of Goods) and less than Rs 50/- Lakhs (for providing Services or sale of goods & providing services).
We cannot charge GST from customer and not take credit benefit of GST paid on purchases. We have issue simple invoice.
The following people cannot opt for the composition scheme-
- Manufacturer of ice cream, pan masala, or tobacco;
- A person making inter-state supplies;
- A casual taxable person or a non-resident taxable person;
- Businesses which supply goods through an e-commerce operator.

Rate of Composition Scheme:

Category of Registered Person	Rate of Tax
Manufacturers, other than manufacturers of such goods as may be notified by the Government (Ice cream, Pan Masala, Tobbacco prodcuts etc.)	2% ( 1% CGST plus 1% State tax) of the turnover
Restaurant Services	5% ( 2.5% CGST plus 2.5% SGST) of the turnover
Traders or any other supplier eligible for composition levy	1% ( 0.5% CGST plus 0.5% SGST) of the turnover
Service Provider	6% ( 3% CGST plus 3% SGST) of the turnover

Documents reqquired for GST Registration:

PAN and Aadhar card of applicant
Photo of applicant
Address Proof like Electricity Bill/land Tax Receipt/Rent Agreement/Telephone Bill
In case partnership firm or LLP (Partnership/LLP Agreement, Identity & Address proof of partners)
In case of Company (MOA, AOA, incorporation certificate, Board Authorization Letter, Identity & Address proof of directors)