In terms of the structure of indirect taxes in India before 2017, the year 2017 was a watershed moment. The Goods and Services Tax, or GST, was implemented in the Indian economy in this year after the Goods and Service Tax Act was passed by Parliament in March. This event signified the end of any other indirect taxes that had previously been imposed across the country by a single consistent statute.
It caused some confusion at first, and because it was so new, many were unable to adapt quickly. However, as time passed, people realized how useful it was in preventing the imposition of various tariffs at different points of the supply chain.
Types of GST
Before we go into the various GST registration methods. Let’s have a look at the four main forms of GST and their significance:
- CGST : The CGST (Central Products and Services Tax) is a tax levied by the federal government on goods and services exchanged within a state. This tax is worldwide and replaces all previous taxes levied by the government, such as the CST, SAD, and others.
- SGST : The SGST, or State Goods and Services Tax, is imposed by each state’s government. This tax has superseded all previous state-imposed taxes such as the Entertainment Tax, Entry Tax, VAT, and others.
- IGST : The application of a tax on the exchange of goods and services between two states is referred to as this. The Integrated Goods and Services Tax, or IGST, is levied when goods or services are carried from one state to another.
Regular GST Scheme
The usual kind of GST registration entails a legalised taxpayer being obligated to collect a particular amount of tax from purchasers of goods and services. Which will be paid to the government once the amount paid as GST on the input value of goods and services has been adjusted. The payment of GST is instant under ordinary GST registration. Which means that the consumer must pay the GST at the time of purchase and it must be collected from the client at the moment of sale.
It’s also worth noting that everyone who is subject to the regular plan is required to file monthly GST returns and pay the tax collected on a monthly basis. This plan also has the benefit of allowing the scheme holder to sell his products outside of his state’s borders. And clients from other states can buy them without limitation.
GST Registration Under The Composition Scheme Has Its Advantages
Before submitting an application for the GST composition scheme, there are a few items to consider. It is only for companies with yearly revenues of less than Rs 1.5 crore. As useful as this scheme is, particularly for SMEs. There are a number of elements that distinguish it from the standard GST Registration system:
- The Composition Scheme is advantageous for local transfers of products and services inside a state. The vendors who operate within a state will be in a better position. Dealers whose activity involves interstate transactions, on the other hand, must choose the standard scheme.
- If a taxpaying individual wants to participate in this programme, he must do so willingly. He will be immediately switched to the regular plan, as he will no longer be eligible for the composition one.
- Only the taxable commodities are subject to GST under the composition scheme. Prior to January 1st, 2018, it was mandatory to pay Composite GST on all commodities, including those that were exempt.
- The authorities have the authority to prosecute anyone who knowingly provides false information in order to register under this system. This strategy is intended to improve the state of small firms, hence no foul play is accepted.
- The taxpayers are not required to provide any invoices in this case. Instead, they merely need to present the authorities with their supply bill.
The Benefits of GST Registration
With all of the above in mind, it’s reasonable to say that becoming a GST payer comes with a slew of benefits and advantages. Here are a few examples of why it’s a good idea to register for GST:
- It is a type of legal proof that recognizes a person as a licensed provider of goods and services.
- Automatically qualifies the individual for all of the GST law’s additional perks and benefits.
- The individual gains the legal right to collect tax from his consumers and credit the taxes paid to his customers or suppliers.
- It is a standard tax applied on products and services across the country, making. The entire indirect tax structure more easier to comprehend.