Advantages of taking registration in GST

Advantages of taking registration in GST  


            Advantages of taking registration in GST  



GST is the biggest tax reform in India, tremendously improving ease of doing business and increasing the taxpayer base in India by bringing in millions of small businesses in India. By abolishing and subsuming multiple taxes into a single system, tax complexities would be reduced while tax base is increased substantially. Under the new GST regime, all entities involved in buying or selling goods or providing services or both are required to register for GST. Entities without GST registration would not be allowed to collect GST from a customer or claim input tax credit of GST paid or could be penalised. Further, registration under GST is mandatory once an entity crosses the minimum threshold turnover of starts a new business that is expected to cross the prescribed turnover.

What is GST Registration

The provision of GST registration has been prescribed under chapter VI of the CGST Act, 2017. With respect to GST, businesses whose turnover exceeds Rs. 20 lakhs (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization carries on business without getting registered under GST, it will be an offence under GST and heavy penalties will apply.

Persons required to get registered under GST

  1. Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
  2. Businesses with turnover above the threshold limit of Rs. 20 Lakhs (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)
  3. Casual taxable person / Non-Resident taxable person
  4. Agents of a supplier & Input service distributor
  5. Those paying tax under the reverse charge mechanism
  6. Person who supplies via e-commerce aggregator
  7. Every e-commerce aggregator
  8. Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person

Advantages of Getting Registered under GST

Registration under Goods and Service Tax (GST) regime will confer following advantages to the business:

  1. For normal registered businesses:
  2. Take input tax credit
  3. Make interstate sales without restrictions
  4. To know more about the Benefits of GST
  5. For Composition dealers:
  6. Limited compliance
  7. Less tax liability
  8. High working capital
  9. To know more about composition scheme
  10. For businesses that voluntarily opt-in for GST registration (Below Rs. 20 lakhs)
  11. Take input tax credit
  12. Make interstate sales without restrictions
  13. Register on e-commerce websites
  14. Have a competitive advantage compared to other businesses
  15. To know more about voluntary registrations
  16. General
  17. Legally recognized as supplier of goods or services. Once a person is registered under the GST Act, he is legally recognized as a supplier of goods and services.
  18. It enables proper accounting of taxes paid on the input goods or services which can be utilized for the payment of GST due on supply of goods or services or both by the business.
  19. The person registered is legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients.
  20. He also gets eligible to avail various other benefits and privileges under the GST laws.

Penalty for not registering under GST

An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000.

However, if the offender has deliberately evaded in paying taxes, the penalty will be 100% of the tax amount.