GST is a value-added tax levied at all points in the supply chain with credit allowed for any tax paid on input acquired for use in making the supply. It would apply to both goods and services in a comprehensive manner, with exemptions restricted to a minimum.
It is an indirect tax on manufacture, sale, and consumption of goods and on services. Multiple types of tax on goods and services will be eliminated. Goods and services shall have tax:
– State Level GST (SGST)
– Central Level GST (CGST)
– Integrated GST (IGST)
Tax-Rate: The tax rates would be at slabs of –
– 5% (on necessities),
– 12%/18% (standard rates) and
– 28% (Luxury and demerit goods).
Migration of the existing taxpayers to GST Regime
All the existing taxpayers registered under VAT, Service Tax, and Excise are required to furnish the details at GST Common portal for the purpose of migrating themselves into GST regime. To begin with, the taxpayers registered under the State Vat Department needs to provide their details and period for furnishing these details are specified for every state.Once the taxpayers provide their details there will be no need for them to register again with the State or Center once the GST Act is implemented. Enrolment process for other existing taxpayers not registered with VAT will be started at a later date.
Any supplier who carries on any business at any place in India and whose aggregate turnover exceeds threshold limit as prescribed in a year is liable to get himself registered within 30 days.
- Every person having PAN is eligible for grant of registration.
- PAN is not mandatory for NON Resident taxable person
- Service tax assessee having centralized registration will have to apply in the respective state wherever they have business.
Taxable Person means a person who is registered or required to be registered under Schedule V of this Act. One who is required to obtain multiple registrations in different States or within one State would be considered as distinct person in each State.
Following persons are required to be registered under CGST Act:
(a) Every supplier shall be liable to be registered under the CGST Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds Rs. 20 lakh. However, in respect of Special Category States, the aforesaid threshold registration limit has been reduced to Rs. 10 lakh.
(b) Person making any inter-state taxable supply (no threshold limit).
(c) Causal Taxable Persons (No threshold limit).
(d) Persons liable to pay GST under reverse charge (no threshold limit).
(e) Electronic Commerce Operator in respect of specified categories of services if such services are supplied through it.
(f) Non-Resident Taxable Persons.
(g) Persons who are required to deduct tax at source
(h) Persons who are required to collect tax at source
(i) Persons who supply goods and/or services on behalf of other taxable persons whether as an agent or otherwise (no threshold limit).
(j) Input Service Distributor.
(k) Persons who supply goods and/or services through Electronic Commerce Operator who is required to collect tax at source (No threshold limit).
(l) Every Electronic commerce Operator (No threshold limit).
(m) Every person supplying Online Information and Database Access or Retrieval Services (OIDAR Services) from a place outside India to a person in India, other than a registered taxable person.
(n) Such other person or class of persons as may be notified by the Central Government or a State Government on the recommendation of the Council.
Following persons shall not be liable to registration in terms of Schedule V:
(a) Any person engaged exclusively in the business of supplying goods and/or services that are not liable to tax or are wholly exempt from tax under CGST Act.
(b) An agriculturist for the purpose of agriculture. It is necessary to add that term “agriculturist” means a person who cultivates land personally, for the purpose of agriculture
(c) Any supplier if his aggregate turnover in a financial year does not exceed Rs. 20 lakh.
(d) Any supplier if his aggregate turnover in a financial year does not exceed Rs. 10 lakh from Special Category States.
We hope this helped in understanding GST a little better. You can also read about Key Points of Registration in GST in blog 1 of the Understanding GST series.