GST Registration

Overview

The goods and service tax was introduced for Indian businesses on July 1st, 2017. It applies to all Indian traders and service providers. The GST is considered to be an ALL-IN-ONE tax that dissolves all the old taxes like VAT, entertainment tax, luxury tax, etc. into it. Every product undergoes various stages in the supply chain starting from the purchase of raw material by the manufacturer to the consumption of the product by the ultimate consumer. GST is levied at each of the stages that the product passes in the process of being consumed.

Components of GST

The GST has 3 components

• The central component. It is also called the Central Goods and Service Tax. Where the central Government levy taxes on all entities.
• The state component. It is also called as State Goods and Service Tax. It is levied by the state Government levy taxes on all the entities
• The third component is the Integrated Goods and Service Tax. In this, when a transaction takes between two or more states then the tax levied on the transaction is charged by the central Government.

Input tax credit

An input tax credit means deducting the tax amount which is already been paid while acquiring the inputs for the business and paying off the remaining or the difference left at the time of payment of tax. In other words, you pay taxes when you purchase goods from any vendor or wholesaler. Similarly, you collect taxes from the customer at the time when you sell these goods to them. With the input tax credit, a tax that is paid at the purchase of goods and services is adjusted with the tax collected at the time of sale of these goods and services, and only the liability which is the difference between the two is to be paid. A tax collected at the time of sale – Tax paid at the time of purchase = liability tax to be paid.

What are the GST tax rates?

• Goods and services that are considered to be the necessities are not taxed by either of the Governments. They are exempted from the taxes.
• Necessities that are consumed in households and the medicines are taxed at a rate of 5%.
• 12% tax is levied on products like computers and processed foods.
• Industrial intermediaries and services, capital goods and other goods are charged by the tax rate of 18%.
• Luxury products are levied by heavy tax rate of 28%.

What is GST return?

A GST return is a document which provides with the information about the income of the business or a person that is required to be filed with the authorities as per the law. GST returns should be filed online and under the GST law the taxpayers has to file two returns on the monthly basis and one annually.

Mandatory documents required for GST registration

• For Proprietorship concern:
  • Aadhar Card of proprietor
  • PAN card of proprietor.
  • Any registration document of proprietorship firm (Shop establishment license, GST Registration, Trade license, MSME certificate)
  • Any one of the following three:
  1. Electricity bill+ NOC+ Rent Agreement
  2. Electricity bill+ Any Tax receipt+ Transfer deed
  3. consent letter+ electricity bill
  • Passport Size Photo of proprietor
  • Mobile number and mail address of proprietor
  • Nature of business
• For Partnership concern:
  • Aadhar Card of all partners
  • PAN card of all partners.
  • PAN card of partnership firm
  • Partnership deed
  • Any one of the following three:
  1. Electricity bill+ NOC+ Rent Agreement
  2. Electricity bill+ Any Tax receipt+ Transfer deed
  3. consent letter+ electricity bill
  • Passport Size Photo of all partners
  • Mobile number and mail address of all partners
  • Authorization letter and Board resolution of partnership firm
  • Nature of business
• For Company/LLP:
  • Aadhar Card of all partners
  • PAN Card of all directors / Designated Partners
  • Certificate of Incorporation
  • Any one of the following three:
  1. Electricity bill+ NOC+ Rent Agreement
  2. Electricity bill+ Any Tax receipt+ Transfer deed
  3. consent letter+ electricity bill
  • Passport Size Photo of all directors / Designated Partners
  • Mobile number and mail address of all directors / Designated Partners
  • Authorization letter and Board resolution of company / LLP
  • Memorandum of Association