Goods and Services Tax (GST) is an indirect tax (or consumption tax) levied in India on the supply of goods and services. The tax came into effect from July 1 2017 through the implementation of One Hundred and First Amendment of the Constitution of India by the Indian government. The tax replaced existing multiple cascading taxes levied by the central and state governments.
Mandatory / Compulsory Registration
Along with these threshold limits, Section 24 of the Act also specifies a list of suppliers for whom GST registration is mandatory. This list includes the following suppliers:
- Anyone required to pay tax under reverse charge.
- Anyone claiming or remitting Input Tax Credit.
- Any person effecting inter-state supply.
- Casual taxable person effecting taxable supply.
- Non-resident taxable person effecting taxable supply.
- Input Service Distributor
- E-commerce Operator
- Any person supplying on behalf of others, whether as an agent or not.
- Every person supplying online information and database or retrieval service from a place outside India to a person in India, who is not a registered person need GST Registration.
- A person supplying through E-commerce who collects tax at source u/s 52.
Benefits of GST Registration
- Termination Of Multiple Taxes : One of the most biggest benefit of GST is the termination of multiple indirect taxes. All taxes that were previously paid does not exist now. This means the previous taxes like excise, sales tax, Service tax, turnover tax etc will not be applicable and all that will fall under common tax called as GST.
- Ease of business : The GST has brought one country one tax concept. This has provided unhealthy competition among states. GST is beneficial for operating interstate businesses.
- Easy Documentation And Tax Filling :Online registration of GST has made it easier and simpler for a businessman. Thus, making it easier and hassle free for return filling tax payment, and refund process.
- More Employment : The GST has reduced the cost of goods and products so it is expected that the demand of goods and product will increase subsequently and to meet such demand, supply has to go up. The requirement of more supply of goods and products will be addressed by only increasing employment. GST will help in poverty eradication by generating more employment and more financial resources.
- Increase in GDP : When demand for goods and services grow, it will naturally increase production supply. Hence GST will increase gross domestic product. It is estimated that GDP will grow by 1-2% due to GST.
Increase in Revenue : An increase in goods and product demand will ultimately increase tax revenue for state and central government. It will boost export and manufacturing activities resulting in increasing GDP.