D M & Associates

The constitution amendment bill for ‘GOODS AND SERVICE TAX’ (GST) was approved in the Parliament Session in August 2016 along with the confirmation by 50 percent of the state legislatures. Hence, all the existing indirect taxes levied by state and center were replaced with the proposed implementation of GST on 1st July 2017.

This move by the Government is the greatest tax reform since independence & is an added benefit to the Indian economy as it strives to eradicate the discrepancies of the existing tax structure & promotes single tax payment on the supply of all goods and services.

One of the much-awaited tax reforms to get launched in the Financial Year 2017-18, improving the ease of doing business for many micro and small businesses in India by reducing compliances. By incorporating multiple taxes into a single tax system, the complexities are bound to get reduced while the tax base would rise substantially.

Under the new GST process, all entities that are involved in buying or selling of goods or providing any services or both are required to obtain GST registration compulsorily. Entities without the registration of GST will not be permitted to collect GST from a customer or claim the input tax credit of GST paid. Also, the GST registration is mandatory once an entity crosses the minimum threshold turnover.

Most importantly, according to the GST Council, business entities situated in the Northeastern and hill states having an annual turnover of Rs.10 lakhs and above would be required to attain GST registration. For all the other business entities in the rest of India would be required to obtain GST registration, only if the annual turnover crosses Rs.20 lakhs.

Entities required to obtain GST registration as per the regulations must file for the registration within 30 days from the date on which the entity becomes liable for obtaining the GST registration. The average time taken to obtain GST registration is about 5 – 10 working days, subject to government processing time and submission of client documents.

It is mandatory for a business entity that is currently registered under any of the existing tax regimes to move to GST law irrespective of the concerned threshold limits. The following central and state level tax regimes will end with the introduction of Goods and Service Tax (GST):

• Central Excise duty.
• Service Tax.
• State VAT.
• Central Sales Tax.
• Entry Tax.
• Entertainment and Amusement Tax (except when levied by the local bodies).
• Purchase Tax.
• State Surcharges and Cess if related to supply of goods and services.
• Taxes on lotteries, betting, and gambling.

1. Tax rates are relatively lower as the tax base will increase substantially.
2. GST will eliminate the cascading effect of taxes.
3. The prices of the goods and services will reduce eventually.
4. GST will promote a shift from unorganized to organized sector.
5. A consistent flow of Input tax credit.
6. Effective & efficient supply chain management.

1. A scanned photograph of the applicant.
2. The Constitution of the Taxpayer (Example – Partnership deed, Registration certificate etc).
3. The proof of principle address of business (Electricity bills, Rent Agreement).
4. Scanned copy of Bank account details.

• Log in to the online site i.e. the GST Portal (www.gst.gov.in).
• Fill Part-A of Form GST Registration form 1.
• Subsequently, the concerned person will receive a reference number for the application through SMS and via E-mail.
• Fill the second part of the form and upload the required documents according to the type of business an entity is engaged in.
• Certificate of registration is then issued by the department.
• Produce the documents within 7 working days along with GST REG-04.
• The officer may also happen to reject the application if he finds any errors. The same will be informed in form GST REG-05 of GST registration.

But if an assessee is not registered under any existing tax legislative then he is liable to register only if the aggregate turnover of his business in any financial year exceeds the threshold limit. The existing threshold limit specified by the GST council is 20 lakhs for all the states except for the North Eastern States where the limit is 10 lakhs.

Apart from the documents required mentioned above, there are no formal requirements for GST registration. The main requirement after GST registration is important. The following should be known regarding the GST Registration:

• Three monthly returns and one annual return should be filed after the registration process.
• One may also opt for the Composition Scheme under GST to ignore heavy compliances.
• Also, various penalties are prescribed under GST.