GST – Some Frequently Asked Questions

What is GST?

GST (Goods and Service Tax) is a tax which will be levied on supply of goods and services right from the point of manufacturing to final consumption by user which means that it will substitute all the taxes which are levied in the process of manufacturing till the final consumption.

Why should I get registration under GST?

It is a mandatory requirement for a business entity registered under any of the Indirect taxes levied by Central or State legislations to migrate to GST or get registration under GST irrespective of the threshold limit.

Is there any other criterion for mandatory registration under GST?

Yes, it is mandatory for every supplier of goods and services to get registered under GST if his aggregate annual turnover during the financial year exceeds Rs. 20 lakhs (Rs. 10 Lakhs in case of North Eastern States).

Any other Mandatory registrations irrespective of threshold limit?

Yes, suppliers mentioned below have to get mandatory registration even if they are not registered under any other Act and the threshold limit is not crossed.

Suppliers who are:

  • Casual Taxable Person
  • Non Residents
  • Engaged in inter-state supply of goods and services
  • Required to deduct TDS u/s 46 or collect TCS u/s 56
  • Input Service distributor
  • Supplying data management services whether located in India or not.
  • Electronic commerce operators supplying goods and services directly or as intermediary to promote exchange (list of specific goods and services will be prescribed for this purpose).

Are there any exemptions from registration under GST?

Yes, the following suppliers are exempt from GST registration.

Suppliers who are engaged in the supply of following goods or services:

  • Exempted Goods (list will be notified by GST Council)
  • Goods like liquor for personal consumption, petroleum products etc.
  • Importing services for personal use as reverse charge will not be applicable.

Is there any provision for a central registration?

No, there is no concept of central registration under GST. Every person will have to obtain a separate registration for every state in which he has a business establishment whether by same name or a different name.

I have 3 units in Haryana; Do I need to take 3 registrations?

No, one registration is sufficient for all the 3 units but separate registrations may be allowed subject to the rules.

Is there any composition scheme under GST?

Yes, Composition scheme is introduced for small tax payers to reduce the compliance burden on them.

When can one get registration under the composition scheme?

  • The annual turnover should not exceed Rs. 50 Lakhs in the preceding Financial year and
  • Are engaged in the supply of goods and services within the same state

What are the tax rates for business registered under Composition scheme?

  • 5% for manufacturers
  • 1% for other than manufacturers

These entities would not be part of credit chain and hence cannot collect any tax from consumers.

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