Simple tips on GST Registration when it is mandatory and optional

What is GST Registration

GST – GST registration is process granting gst registration certificate with unique PAN based gst number and every dealer given an option to register gst online, Once GST is approved all rules should be followed and returns should be filed periodically without fail. GST Act is systematic in all aspects and everything will according to rules and regulations, calculation of tax credit matching everything is done by robust GSTN network.

Who needs to apply GST

Classification of Based on Turnover – Every person whose Annual aggregate turnover is greater than 40 Lakhs is required to apply for GST and in special category states it is Rs.20 Lakhs,  and for service sector the limit is 20 lakhs. So when your turnover actually crosses the limit or expected to cross the limit you need to apply gst online through GST Registration portal

Registered in old services tax or sales tax – Every Person who already registered in any of the state VAT, service tax, Excise duty etc are also required to migrate to GST, they need no apply for new gst registration

Interstate Supplies – Every supplier who makes sale or purchases out of state should Register GST    , it is also mandatory for importers or exporters to apply gst registration.

Commerce Supplier – Every e-commerce supplier of goods or services is required to apply for GST registration irrespective of turnover limit, there is certain relaxation for supplier of services as notified by government

Every Casual Taxable Person.

Three types of GST Registration

1. Composition Dealers – Composition scheme is applicable for suppliers whose turnover is  RS.75,00,000 and less. Composition dealers should not show tax amount separately in GST invoice. Composition dealer should have the declaration on their invoice.

Declaration:- “Composition taxable person, not eligible to collect tax on supplies”

Filing of Returns – Composition Taxable person is required file GST returns on a quarterly basis in GSTR 4 and Annual Returns in GSTR – 9A.

Input Tax Credit – they cannot claim input tax credit and are also liable to deduct GST under Reverse charge basis.

GST Composition scheme Rate of Taxes 

  • Manufactures – 2 %
  • Food Business operator – 5 %
  • Other Suppliers –  1 %

Conditions for Registration
1. Only for suppliers dealing within the state.
2. Input tax credit not available.
3. Tax amount should not be shown separately.
4. Applicable for Supplier of services with certain restrictions.

2. Normal Registration

All suppliers who are liable to registration and not covered under composition scheme or prefers to take input credit shall register as a normal dealer and file monthly returns in FORM GSTR-1, GSTR2, GSTR-3B and Yearly Return in GSTR-9.

3.GST Optional registration

Any person can apply GST on optional basis there is no restriction or conditions to register on optional category. Option gst registration is done mainly for benefit of input tax credit utilization and transaction with corporate. Under optional GST registration, it is mandatory to follow all rules and regulation applicable to normal GST Dealer. Generally Optional registered gst dealer fail to file gst returns on time and gives least priority as their turnover is less. Ignoring GST filing will result in high penalty when you really need it.

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