The government implemented the GST system after enacting the following bills:

  • Bill on the Goods and Services Tax
  • Bill to compensate for the Goods and Services Tax
  • Bill for an Integrated Goods and Services Tax
  • Union Territory Goods and Services Tax Bill

Also Read: GST Registration

The ineffective VAT system was first exposed, and then GST was enacted to replace it and update India’s entire taxation system. The goal of the Goods and Services Bill is to make taxation much easier for both suppliers and customers.

As previously stated, the prior taxing structure was inconsistent and caused much uncertainty. In other words, it lacked the consistency that GST gives. The introduction of a single GST rate across the nation makes it possible to tax goods easily and consistently, regardless of the category to which they belong or the state to which they are subject to tax.

GST’s Advantages

Some of the GST’s advantages are as follows:

  • It eliminates the taxation’s cascading effect.
  • It combines several taxes into one.
  • It contributes to the overhaul of the Indian taxation system.
  • It contributes to the restructuring of India’s taxation structure.
  • It improves the worldwide competitiveness of goods and services produced or manufactured in India.
  • It has a substantially higher registration threshold than its predecessor.
  • The GST procedure is significantly easier to complete online.
  • It also offers a small business and MSMEs composition scheme.
  • It gives the e-commerce industry a distinct treatment.
  • It treats the e-commerce industry differently.
  • It has boosted logistics efficiency due to its simplicity.

GST’s Components

In its scope, GST contains three sub-taxes or individual taxes:

  • IGST : Integrated Good and Service Tax – The Union Government collects this for inter-state commerce, which is a sale between two states.
  • SGST : State Good and Service Tax – The state government collects this for intra-state commerce, which is a sale or transaction that takes place within a single state.
  • CGST : Central Good and Service Tax – The Union Government collects this for intra-state commerce, which is a sale or transaction that takes place within a single state. The only difference between CGST and SGST is that the former is levied by the federal government.

GST Registration

Every corporation, organization, cooperative society, Self-help group, federation, union, individual, and other entity that supplies goods and services must register with the Goods and Services Tax. 

GST registration is not dependent on the type of products or services provided and is standard for all categories, whether they are daily necessities, luxurious items, or recreational activities. It is independent of the consumer who purchased or enjoyed the product.

GST is calculated based on an individual’s or organization’s annual turnover, or total income for the year. If an individual’s or a firm’s yearly turnover exceeds a predetermined value defined by the Government of India or the Central Board of Indirect Taxes and Customs (CBIC), the individual, corporation, or organization must register for GST.

  • The predetermined value of annual turnover for GST registration in most states is INR 20 lakhs per year.
  • Other states’ yearly turnover should be greater than INR 40 LPA.
  • The annual turnover in some states should exceed INR 10 LPA (For North-east states and hill states)

The Goods and Services Tax Network, or GSTN, is where the concerned individual, company, or organization can register for GST.

They can then impose GST on their clients, or the people or businesses with whom they conduct business, after registering and paying the requested and pre-defined tax values to the relevant authorities.

An individual or business will receive a GSTIN, or Goods and Services Tax Identification Number, which is special, after successfully completing the GST registration process with the Goods and Services Tax Network.

GSTIN is a unique 15-digit identifying code. The Government of India assigns it to each state. An individual or corporation receives a legal identity as a supplier authorized by the Indian government after receiving their GSTIN. Following that, the business or individual can claim input tax credit and charge GST to the recipients of their goods and services.

Definition of GST Registration

The GST registration procedure refers to the process of registering a business for GST purposes.

Only a limited subset of enterprises must register with the CBIC and the Government of India for the Goods and Services Tax. The government of India has made it necessary for those enterprises to register under GST.

After being asked to do so and within a predetermined deadline, an individual or organization that continues to conduct business without registering under GST will be required to pay a significant quantity of money. This action will be regarded as illegal. The Central Government and the CBIC will determine the appropriate penalty.

Individuals or businesses wishing to register for GST should go to the Official GST Registration Portal. Before completing the GST registration process online, consumers should read the portal’s guidelines.

One can register for GST at their nearest GST Seva Kendra using the offline approach.

The GST Registration’s Consequences

There are several drawbacks to registering a business for GST. A firm or individual that has already completed its GST registration for the business, either online through the GST website or offline, is entitled to all of the benefits that come with completing the registration procedure.

After completing GSTN registration, an individual or organization must pay the desired and predefined amount of tax to the concerned authorities, and are then permitted to levy tax revenues from their customers, or the people or companies with whom they deal, in the appropriate amount of GST.

Suggested Read: GST Return Filing