The Law Behind GST and Why the Government Has Made GST Essential

The Goods and Services Tax (GST) is a step toward indirect tax reforms in India. The GST was introduced by bringing together a large number of Central and State taxes into a single tax, to mitigate the adverse effects of double taxation, and introduce a common national market. From a consumer's point of view, there is a reduction in the overall tax burden on goods, which is around 25%-30% by current estimates. The GST introduction was also aimed at making Indian products more competitive in the domestic and international markets as there is a significant neutralization of input taxes across the production and distribution value chain. GST is a shift from an informal to a formal economy.

What is GST and How Does GST Help the Government?

GST or the Goods and Services Tax is levied on goods or services or both in India. It is a destination-based consumption tax and is so designed that the tax is collected at every stage. It prevents cascading of taxes as the credit of tax paid at the previous stage sets the tax to be paid at the next stage of the transaction. It has widened the tax base and has also improved taxpayer compliance. It supports cross utilization of input credits which makes the supply chain tax neutral and thus benefits the industry.

With the introduction of GST, the Ease of Doing Business Index in India has improved and the GDP to has gone up. The uniform rates across states eliminate the rate arbitrage between neighbours and also inter and intra state sales.

Businesses That Come Under GST 

According to Sec 2(17) of CGST Act, 2017 the term Business under GST includes any trade, profession, vocation, commerce, manufacturing, adventure, banks providing financial services to its customers, wager, or any other activity, irrespective of whether it is for monetary benefit or not.

The list is very long with transactions, services, supplies, etc each being explicitly explained under the GST law.

Process for GST Registration 

It is an online process that needs to be done on the government website gst.gov.in. Every dealer with an annual turnover that exceeds a certain amount prescribed by the state has to register for GST.

·         Aadhar authentication is mandatory.

·         One needs to register on the GST portal by clicking the Registration -New Registration tab first.

·         Next, select the taxpayer type

·         Select state and district

·         Name and PAN of the business.

·         Key in your email id and mobile number and enter the OTP received.

·         Note down the TRN and fill in part B within 15 days.

·         Enter the trade name of the business

After all the details are filled you need to go to the verification page and tick on the declaration. On submission, you get an ARN and you can keep checking the status till it is processed and you get successfully registered for GST.

Documents required for GST registration:

·         Photographs

·         Constitution of the taxpayer

·         Proof of the place of business

·         Bank account details

·         Verification and Aadhaar authentication

What happens if any business does not get the GST?

There are penalties in place for evading the GST.10% of the tax due or Rs.10,000 whichever is higher is charged for not registering under GST. A late fee of Rs.100 per day under CGST and another Rs.100/per day for SGST is applicable up to Rs.5000.

Hiring a consultant for the GST registration process:

GST is one of the most important obligations that a business has towards the government and organizations can ill afford to go wrong with it. Knowing the different tax slabs, knowing the exemptions, knowing the different GST categories that cover businesses interstate, intra-state, and overseas, and filing various GST reports and returns all require experience.

Legalo consultants are well versed with the latest laws of the land and requirements and can help with timely GST submission. Legalo can be trusted as regards your data and working under the highest ethics for efficient GST return filing services.

Read All about GST Returns here.

For our GST related services, visit – GST Registration Process.

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