FAQs - GST (Goods & Services Tax)
Q. What are the benefits of GST Registration?
A. GST registration has various benefits. Here are some of them:
GST has eliminated the cascading effect of tax: GST is a form of Indirect Tax that is designed to subsume all the indirect taxes under one umbrella. GST has reduced the cascading effect of tax that was evident earlier.
Registration threshold is higher: Earlier under VAT, any business that had a turnover of more than Rs. 5 Lakhs was liable to pay VAT. This limit was different in different states. Also, the service providers were exempted from service tax if the turnover was less than Rs. 10 Lakhs. Under GST, this threshold has been increased to Rs. 20 Lakhs which has exempted many small traders and service providers.
Composition scheme for the small businesses: Small businesses are benefitted as they can exercise the option for utilizing the composition scheme. The composition scheme has considerably brought down the compliance and the tax burden on small businesses.
Simple and easy online procedure: The process of GST registration is completely online and it is super simple. All you need to do is submit the documents required to experts.
Fewer compliances: Under GST there is only one return that is to be filed. There are around 11 returns under GST out of which all of them can be filed online. Vyapaar Pundit can also help you to file your GST returns.
Improved efficiency of the logistics: Under the Goods and Services Tax Act, the restrictions on the interstate movement of the goods have been reduced considerably. This reduction in unnecessary logistics costs has caused profits for the businesses that are involved in the supply of goods through transportation.
The unorganized sector is now regularized under GST: Before the GST era, a lot of industries in India like construction and textile were largely unregulated and unorganized. Under GST, there are provisions where the compliances can be met online. This has brought considerable accountability and regulation to these industries.
Q. What is the deadline for getting registered under GST?
A. An entity liable to be registered under GST should apply for registration within 30 days of meeting the criteria. Casual taxable persons and non-resident taxable persons are required to be registered under GST prior to commencing business.
Q. Who is the primary authorized signatory?
A. The primary authorized signatory is the person who is primarily responsible to undertake tasks on the GST portal on behalf of the taxpayer. It could be the promotion of the business or any other trustworthy person nominated by the promoters of the business.
Q. Is PAN mandatory for obtaining GST registration?
A. Yes. PAN is mandatory for obtaining GST registration. In the case of proprietorship, the PAN of the proprietor can be used. In the case of LLP, Company, Trust or other types of a legal entity, PAN must first be obtained for the entity. However, PAN is not mandatory for the GST registration of foreigners and foreign companies. For non-resident taxable persons, GSTIN with a fixed expiry date will be provided based on the other documents provided to prove existence.
Q. What is the validity of GST registration?
A. GST registration does not have an expiry date. Hence, it will be valid until it’s cancelled, surrendered or suspended. Only GST registration for non-resident taxable persons and casual taxable persons have a validity period that is fixed by the authorities while
issuing the GST registration certificate.
Q. Can a person with no GST registration collect GST?
A. No, only persons registered under GST are allowed to collect GST from the customers. A person not registered under GST cannot even claim the input tax credit on the GST paid.
Q. What is an E-way bill?
A. An E-way bill is an electronic document which serves as an evidence to the movement of goods having a value of more than Rs. 50,000. It available to a supplier or an individual transporting goods. It has two components; Part A, with details such as GSTIN of the supplier and recipient, place of delivery, value of goods, HSN code, reason for transportation and Part B, with details of the vehicle and transport documents.
Q. What are the benefits of an E-way bill?
A. It is a wholly digital interface that eliminates the need for state boundary checks. It will facilitate faster movement of goods and improve the turnaround time of trucks thus reducing costs for the supplier.
Q. When should an E-way bill be generated?
A. As per rule 138 of the CGST Rules, 2017, an E-way bill has to be generated prior to the commencement of the transport of goods.
Q. Is it mandatory to generate an E-way bill?
A. It is mandatory to generate E-way bill in all cases wherein the value of consignment is more than Rs. 50,000. However, it is not necessary to generate one wherein the goods are being transported by a non-motorized conveyance or if they are being transported from the port, airport, air cargo complex, and land customs station for clearance by customs.
Q. What is the penalty for not generating an E-way bill?
A. Any taxable person who transports any goods without the cover of specified documents (E-way bill is one of the specified documents) shall be liable to pay a penalty of Rs. 10,000 or the amount of tax sought to be evaded (whichever is higher).
Q. What is a composition scheme?
A. Small businesses registered under the GST composition scheme can pay GST at a fixed rate of turnover every quarter and file quarterly GST returns. Composition levy would generally be related to small taxpayers who are supplying goods and services or both to the end consumer with a lower turnover.
Q. What are the eligibility criteria?
A. Any existing taxpayer whose annual turnover did not cross the Rs. 1.5 Crores threshold in the preceding financial year. However, service providers with the exception of restaurants and caterers are not eligible, neither are casual taxable persons nor non- resident Indians.
Q. Can Input Tax credit be claimed under the composition scheme?
A. No, Input Tax credit cannot be claimed by a dealer opting for a composition scheme as they are out of the credit chain. They cannot take credit for their input supplies.
Q. How long will the scheme be valid?
A. The validity of the composition scheme will depend upon the option exercised by a taxable person as long as all the conditions are fulfilled as specified in the law. However, individuals who are eligible for the scheme can choose to opt-out of it by simply filing an application.
Q. How will the aggregate turnover be computed?
A. It will be computed on an all-India basis and will include the value of all taxable supplies. It would exclude inward supplies under reverse charge as well as central, state/union territory and Integrated Taxes and cess.
Q. What is inter-state supply?
A. Inter-state supply of goods or services is when the supply location is a different state from the delivery location. In addition, the inter-state supply applies to the supply of goods or services by an SEZ unit or the export of goods or services.
Q. What is intra-state supply?
A. An intra-state supply of goods or services applies when the place of supply is in the same state as the location of the supplier. Intra-state supply does not include the supply of goods/services to SEZ units or developers, imports or exports.
Q. What is SGST?
A. As per the SGST Act, the State GST or SGST applies to intra-state supplies of goods and services. It is administered by the respective state government. SGST liability can be set off against SGST or IGST input tax credit only.
Q. What is CGST?
A. Central GST or CGST would be levied under the CGST Act on the intra-state supplies of goods and services. Hence in the case of intra-state supplies of goods and services, both the central and state government would combine their levies with an appropriate revenue sharing agreement between them.
Q. What is IGST?
A. Integrated GST or IGST is the tax levied under the IGST Act on the supply of any goods and services in the course of inter-state trade across India. Further, IGST would include any supply of goods and services in the course of import to India and the export of goods and services from India.
Q. What is GST REG – 01?
A. GST REG – 01 is the GST registration form which is required to be filed online in order to get the GST registration in India.
Q. Who all are liable to mandatory to register for GST?
A. As per GST act and rules, there are a few categories of people who are required to register under GST mandatorily. The most common and important ones are as follows:
All persons selling outside the state
Persons falling under reverse charge
Persons selling on e-commerce like Flipkart, Amazon etc.
Q. How can I sell goods in another state under GST?
A. To sell goods in another state, you need to take the GST registration and you should charge IGST. IGST is the form of GST which is charged on every interstate sale. Further, if you are selling goods or providing services inside your state then CGST and SGST shall be applicable.